Working Paper: NBER ID: w26590
Authors: Michael Lokshin; Martin Ravallion
Abstract: It will be politically difficult to liberalize international migration without protecting host-country workers. The paper explores the scope for efficiently managing migration using a competitive market for work permits. Host-county workers would have the option of renting out their citizenship work permit for a period of their choice, while foreigners purchase time-bound work permits. Aggregate labor supply need not rise in the host country. However, total output would rise and workers would see enhanced social protection. Simulations for the US and Mexico suggest that the new market would attract many skilled migrants, boosting GDP and reducing poverty in the US.
Keywords: work permits; migration; social protection; economic efficiency
JEL Codes: F22; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Market for work permits (WPs) (J68) | Increased GDP in host countries (F69) |
| Market for work permits (WPs) (J68) | Decreased poverty rates in the US (I32) |
| Increased GDP in host countries (F69) | Decreased poverty rates in the US (I32) |