Allocational and Distributional Aspects of Future Immigration to Western Europe

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Abstract
This article shows that an analysis of the impacts of immigration has to be divided into allocational and distributional aspects. From an allocational point of view, like free trade in goods, services and capital, migration is welfare-improving as long as marginal productivities of labor are not equalized worldwide. From a distributional point of view, however, the immigration society has to bear the effects of sharing its common public goods and its social values with the new immigrants. Free immigration will only be allowed if the allocational welfare gains exceed the distributional welfare losses. According to this rule of thumb, a guideline for an efficient migration policy is sketched.

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