Controlling Migration in an Open Labor Market

A direct immigration policy is no longer feasiblefor a single region in a common labor market. Within apolitical economy approach, this paper focuses on the question ofwhether migration can be controlled through the composition ofgovernment expenditures. Taking into account both capital and laborincome, it turns out that the median voter's income is U-shaped in thenumber of immigrants. Therefore, the government can eitherprovide less of the goods preferred by foreigners in order to minimizeimmigration or carry out an active immigration policy byshifting its expenditures towards those publicly provided goods. Thepaper identifies the factors that determine the government'schoice between the two strategies.