Transferability of Migration Licenses and the Distribution of Potential Rents

This paper compares the effects of migration restrictions using licenses which are freely traded in a competitive labor market to those that occur when licenses are allocated to firms who are not permitted to trade them. There is reason to expect that a policy of making licenses non-transferable will not only affect production efficiency, but also to allow producers to capture more of the potential migration rents. Applications to migration policies in the Gulf Cooperation Council (GCC) countries are discussed.