Optimal Immigration Policy in the Face of Potential Radicalization

By Alessandro Cigno,  Alessandro Gioffré, Annalisa Luporini

We derive the immigration policy that maximizes the residents' expected welfare, taking into account the cost of keeping immigrants out, and the expected benefits of letting immigrants in, under different hypotheses concerning the risk that some of the immigrants' children will become radicalized. We find that a certain amount of immigration is generally optimal. If education directly or indirectly reduces the risk of radicalization, the optimal policy may include also an educational subsidy for the immigrants' children.