Department of Economics and Business Economics

Endogenous Immigration Behavior and Effects of Immigration Policies

Research output: Working paper/Preprint Working paperpeer-review


Abstract Immigration becomes an important topic that policy makers are concerned in the recent decades. This paper studies the motivation of immigrants move from their home countries to the host countries by using a two-country labor search and matching model. It shows that the labor mobility between developed and developing countries are double direction. It finds that skilled immigrants moves from developing countries to developed countries for better social security, while the ones move from developed countries to developing countries is for higher human capital return. There is no unskilled workers move from developed countries to developing countries. Subsidizing firms that hiring native workers in developed countries makes labor market outcomes better off but attracts more immigrants. Taxing firms that hire foreign workers in developed countries increases unemployment rate and makes the labor market in developed countries less attractive. Taxing immigrants from developing countries helps to reduce the population of immigrants. Subsidizing skilled workers from developed countries can help to attracting skilled immigrants from developed countries to developing countries.
Original languageEnglish
Number of pages35
Publication statusPublished - Aug 2020

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