Migration; Self-enforcing Mechanism; Repeated Games
Abstract :
[en] This paper considers whether countries might mutually agree a policy of allowing
free movement of workers. For the countries to agree, the short run costs must
outweighed by the long term benefits that result from better labor market flexibility
and income smoothing. We show that such policies are less likely to be adopted for
less risk averse workers and for countries that trade more. More surprisingly we find
that some congestion costs can help. This reverses the conventional wisdom that
congestion costs tend to inhibit free migration policies.
Disciplines :
International economics
Author, co-author :
Picard, Pierre M. ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
