DP16777 Controlling Irregular Migration: Can a Market for Temporary Foreign Work Permits Help?
We study how temporary visa schemes can be designed to drive smugglers out of business while meeting labor market demand in host countries. The policy trade-off between migration control and ending human smuggling can be overcome by combining internal and external controls with a regulated market for temporary visas. In this market, visa duration and price are set at "eviction" levels, designed to throttle smuggling activity. We use information on irregular migration from Senegal to Spain and the Democratic Republic of Congo to South Africa to calibrate the eviction prices of visas for these two routes. Our results highlight important constraints for governments seeking to prevent temporary workers from overstaying, especially on South-North routes such as Senegal to Spain. We suggest combining a regulated market for visas with tighter sanctions against employers of undocumented workers as a new way forward.