Combining physical and financial solidarity in Asylum Policy: TRAQS with matching

Transcription

1 Combining physical and financial solidarity in Asylum Policy: TRAQS with matching Jesús Fernández-Huertas Moraga Universitad Carlos III de Madrid, IAE (CSIS) and IZA Milan, April 22 nd, 2016 Conference on Immigration, Refugees and Asylum Policies

2 COMBINING PHYSICAL AND FINANCIAL SOLIDARITY IN ASYLUM POLICY: TRAQS WITH MATCHING Immigra'on Refugees and Asylum Policies Milan, Bocconi University, 22 nd April 2016 Jesús Fernández- Huertas Moraga Universidad Carlos III de Madrid, IAE (CSIC) and IZA Hillel Rapoport Paris School of Economics and Migra'on Policy Center, European University Ins'tute

3 Where do we stand? Ø The EU Commission decided to give solidarity in the field of asylum a prac:cal meaning in the form of a quota system: 180,000 refugees/asylum seekers to be relocated (160,000)/reseGled (20,000) in two years. Ø This is a very much welcome development due to the many imperfec:ons of the Dublin system. Ø EU- Turkey deal on reseglement only reshuffles reloca:on and reseglement (no new numbers). Ø State of play (11 th April 2016): 1,145 reloca:ons, 4,873 reseglements (79 within the EU- Turkey deal).

4 What do we propose? We propose to supplement the quota system with two important addi:ons that: Ø make it more efficient (cost- effec:ve) from the perspec:ve of host countries and, therefore, make them more likely to par:cipate; Ø allow for taking refugees preferences into account, hence improving their integra:on prospects; Ø introduce a sanc:on mechanism that gives countries incen:ves to treat refugees decently.

5 The proposal: TRAQs with matching Think of it as a 3- stage rocket Ø 1 st stage: alloca:on of ini#al quotas. We follow the EU distribu:on key: popula:on, GDP, unemployment, past refugees. Ø 2 nd stage: the matching mechanism, whereby refugees preferences over des:na:ons and des:na:on countries preferences over refugee types are taken into account. Ø 3 rd stage: the tradable quotas system. Note that the 3 rd stage cannot work without the other two, and the 2 nd cannot be implemented without having the 1 st stage in place hence the rocket metaphor.

6 Stage 1: Initial Quotas We take the current system, proposed by the European Commission and approved by the European Parliament and the European Council, as given but note that there are now three rules for alloca'ng responsibili'es for protec'on: Ø Dublin regula'on: refugees are the responsibility of the receiving state. Ø Reloca'on/reseZlement distribu'on key: 40% popula'on, 40% GDP, 10% unemployment, 10% past refugee arrivals. Ø Financial contribu'on: Asylum, Migra'on and Integra'on Fund coming from the EU budget (GNI, VAT, etc.).

7 Stage 2: the Matching Mechanism It has two components: Ø Taking refugees preferences over des'na'ons into account. Ø Taking countries preferences over refugee types into account. The matching mechanism is adapted from the literature on college admissions and its applica'on to the alloca'on of junior doctors to hospitals in the US. As the name reveals, its goal is to op'mize the quality of the match between a refugee and a des'na'on. Proper'es: Ø incen've compa'ble (leads to truthful revela'on of preferences). Ø efficient (no Pareto- improvements possible). Ø fair (equal treatment). Main issue: no refugee can be forced to move to an undesired des'na'on.

8 a: Migrants preferences 1. Each refugee/asylum seeker to be resezled/relocated ranks all poten'ally desired des'na'ons (preferred to current one). 2. An ordering of refugees is randomly chosen. 3. Assign the first refugee her first choice, the second refugee her first choice and so on un'l a refugee chooses first a country whose quota is filled. 4. Assign that refugee her second choice or, if that one is also filled, her third choice and so on. 5. If all the quotas are filled for the countries for which the refugees would be willing to go, that par'cular refugee is taken out of the pool and subs'tuted for another one.

9 b: Countries preferences Ø Host countries may be homogeneous in terms of preferences over refugee type (e.g., skilled v. unskilled immigrants - - ver'cal differen'a'on). In this case taking their preferences into account does not change anything. Ø If there is heterogeneity in preferences over refugee type (e.g., English v. French- speaking refugees horizontal differen'a'on), countries may affect the type of refugee they will eventually host, thus reducing expected costs.

10 The Matching Mechanism Selec'on criteria of countries par'cipa'ng in EUREMA

11 Stage 3: Tradability Tradable quotas are appropriate where: Ø There are externali'es involved (here, refugee protec'on is an interna'onal public good). Ø Transac'on costs are low (here, the ins'tu'onal sekng already exists). Ø Countries have very different (objec've and subjec've) costs of hos'ng refugees: Direct Costs: Recep'on and accommoda'on, Administra've procedures, Poten'al removal, Poten'al integra'on measures, etc. Indirect Costs/Benefits: immigra'on surplus associated with refugees and asylum seekers, net fiscal contribu'on, social and poli'cal costs, etc.

12 TRAQs a diagrammatic example Efficiency of the Market Based Solu'on

13 TRAQs in Practice: Computerized Continuous Double Auctions CCDA is a mechanism to match buyers and sellers of a par'cular good, and to determine the prices at which trades are executed. Countries place bids (buy orders) and asks (sell orders) simultaneously. Outstanding orders are maintained in an order book. The market price is determined by the set of orders in the order book. Countries may at any 'me buy or sell immediately at the market price. Trades are executed whenever the highest bid exceeds or is equal to the highest ask price. CCDA are omen used for trading of equi'es and deriva'ves.

14 TRAQs in Practice: Compensation Mechanism Efficiency is obtained as long as countries for which it is costly to host refugees (refugee- unfriendly countries) compensate refugee- friendly countries for the part of the quota they do not assume. Allow countries to choose to exert their solidarity physically (receiving quotas) or financially (paying others). The market solu'on can be replicated through taxes and subsidies. Current system: Taxes: contribu'ons to the EU budget, proposal of a penalty amoun'ng to 0.002% of GDP if quota not accepted. Subsidies: 6,000 euros per refugee.

15 TRAQs in Practice: Simulations

16 Simulation with quadratic costs and stated preferences for 180,000 refugees

17 Fiscal costs of refugees vs. penalties/ subsidies Countries AMIF Subsidy per refugee Penalty per refugee refused Fiscal cost per refugee in 2015 (IMF, 2016) Germany 6,000 1,255 12,238 France 6,000 1,206 n/a Spain 6, n/a Poland 6, n/a Netherlands 6,000 1,246 26,528 Romania 6, n/a Belgium 6,000 1,200 8,074 Sweden 6,000 1,317 13,254 Austria 6,000 1,236 n/a Portugal 6, n/a Average 1,549 17,170

18 Conclusion The mechanism we propose reduces the expected cost for receiving countries in three ways: Ø First, the tradable quotas system allows countries to contribute to refugees resezlement either through visas or through money: it makes it possible for countries to exploit their compara've advantage in hospitality. Ø Second, the fact that refugees preferences over des'na'ons are taken into account makes them less likely to leave the country and improves their integra'on prospects, thereby reducing the cost of integra'ng them. Ø And third, the fact that countries can express their preferences over the type of refugees they would like to host also reduces the expected costs.

19 Conclusion Ø The important expected cost reduc'on makes it more likely that more countries will want to par'cipate. Ø The fact that refugees preferences to some extent are taken into account improves their long- term integra'on prospects and should therefore draw support on the side of NGOs. Ø The mechanism allows for experimenta'on, learning and flexibility. Ø Actually, it would be a good idea to implement TRAQs alongside the exis'ng EC proposal in a way that will allow for impact evalua'on.