*We appreciate the many helpful comments we received on earlier drafts from the organizers and participants in this NBER project. We are particularly grateful to Riccardo Faini and C:\mydocuments\chiswickb_paper3.doc Jeffrey Williamson for constructive suggestions. We are, however, solely responsible for any errors of omission or commission.

Any opinions expressed here are those of the author(s) and not those of the IIIS. All works posted here are owned and copyrighted by the author(s). Papers may only be downloaded for personal use only. Individual Attitudes towards Immigrants: Welfare-State Determinants Across Countries ∗ Giovanni Facchini † and Anna Maria Mayda ‡

There are large differences in immigration (per capita) levels among rich OECD countries. In addition these differences are unrelated to the respective levels of income per capita and display a large persistence over time. Existing economic theories of immigration cannot explain these facts. This paper presents a dynamic political-economy model of immigration where agents choose an immigration policy at each period. In the model immigration poses a trade-off to the native voters. Wage gains from a given immigration policy need to be compared to its expected political costs (if any). The latter may arise because immigrants gain voting rights and their political preferences may be against those of the voters who let them in. The equilibrium can be characterized analytically. Immigration is shown to depend crucially on the degree of intergenerational mobility in skills in the economy. When mobility is low the political effects of immigration determine the policy whereas for high mobility the wage motive dominates. For some parameters the model produces immigration patterns that resemble those present in the data. In the last section I plan to test whether the model provides an answer to the empirical puzzle. ∗ I am greatly indebted to Jess Benhabib for his patient role as my advisor and to Alberto Bisin for tons of help. Also, I have greatly benefited from discussions with Sophie Bade, Joan

The purpose of this paper is to explain the attitudes toward immigration and the formation of immigration policy in a small open economy setting including a non-traded sector and imperfect labour mobility across sectors. The direct democracy approach is used to transmit voters ’ attitudes into immigration policy. I find that the voters regardless of their skill level will be opposed to the inflow of low-skilled immigration and will favor high-skilled immigration, if the domestic non-traded and imported goods are poor substitutes in consumption. If the degree of substitution is between non-traded and imported good is sufficiently high, a country with a high-skilled (low-skilled) median voter will be favorable (opposed) to both low-skilled and high-skilled immigrants. At an economy wide level, higher skill level of voters makes them more tolerant towards immigration.

While anecdotal evidence suggests that interest groups play a key role in shaping immigration, there is no systematic empirical evidence on this issue. To motivate our analysis, we develop a simple theoretical model where migration policy is the result of the interaction between organized groups with conflicting interests towards labor flows. We evaluate the key predictions of the model using a new, industry-level dataset from the United States that we construct by combining information on the total number of immigrants and H1B visas with data on lobbying expenditures associated with immigration. We find robust evidence that both pro- and anti-immigration interest groups play a statistically significant and economically relevant role in shaping migration across sectors. Barriers to migration are lower in sectors in which business lobbies incur larger lobbying expenditures and higher in sectors where labor unions are more important. JEL classification: F22, J61.

The issue of the free movement of persons occupies center stage in the negotiations on EU enlargement. Opinion polls and household surveys reveal that a majority of EU citizens are fearful of the consequences of the free movement of persons. Influenced by these surveys, the EU Commission and several studies have reviewed the pros and cons of alternative flexible transitional arrangement proposals ranging from the current bilateral guest-worker arrangements practiced by some EU members to the establishment of fixed quotas during a limited period of time. These suggestions are reminiscent of the Swiss experience with immigration. At the same time, under the system of direct democracy, the Swiss electorate has voted regularly since 1970 on the policies towards immigrants and on the shape of immigration policy. The paper reviews the Swiss experience with immigration policy and draws on the unique direct-democracy setting to bypass the problem of “hypothetical bias” plaguing the analysis of conventional survey data. Determinants of attitudes towards immigration are analyzed using individual-level survey data for 2000. JEL classification: F22, J61, D72

This paper uses three years of individual-level data to analyze the determinants of individual preferences over trade and immigration policies in the United States. Different economic models make contrasting predictions about what forces should shape these preferences. We have four main empirical results. First, we find that factor type dominates industry of employment in explaining support for trade barriers This result is consistent with a Heckscher-Ohlin model of the United States in which the country is well endowed with skilled labor relative to the rest of the world. Second, we find that home ownership also matters for individuals ' trade-policy preferences. Independent of factor type, home ownership in counties with a manufacturing mix concentrated in comparative-disadvantage industries is strongly correlated with support for trade barriers. This finding suggests that in addition to current factor incomes driving preferences as in standard trade models, in reality preferences also depend on asset values. Third, less-skilled workers are significantly more likely to prefer limiting immigrant inflows into the United States. This result suggests that over time horizons relevant to individuals when evaluating immigration policy, individuals think that the U.S. economy absorbs immigrant inflows at least partly by changing wages. These preferences are consistent with a "multi-cone " Heckscher Ohlin trade model and with a factor-proportions-analysis labor model. Fourth, we find no evidence that less-skilled

Immigration policy in a small trade distorted economy:

The views expressed in this paper are those of the author(s) and not those of the funding organization(s) or of CEPR, which takes no institutional policy positions. Do Interest Groups affect Immigration? ∗

Majority voting outcomes over different immigration levels of lowskilled workers are examined in a two-period overlapping-generation model in which the labour market and intra- and intergenerational transfer schemes translate the impact of immigration into preferences of heterogeneous citizens. In most of the cases being examined, the model predicts a unique policy choice. However, a voting cycle can also arise in certain circumstances, subjecting the referendum outcome to manipulation.