Abstract
We analyze the effects of immigration quotas on growth and welfare in a North-South version of the quality ladders growth model. Quotas in the North increase the growth rate. However, they lower the static utility level and the discounted welfare of Northern workers. Also the discounted welfare of asset owners drops. Hence, unlike in the static migration model where the representative agent in the host country benefits from immigration, in our dynamic model, the representative agent loses despite a positive growth effect. Winners from immigration quotas are the immigrants and the remaining workers in the South.