Evaluating Immigration Policy: Potentials and Limitations

Based on the ideas developed in the literature on the evaluation of active labor market policy, this paper provides a framework for the evaluation of key elements of immigration policy. To this end, the fundamental ingredients of evaluating policy interventions are explained and the specific case of immigration policy is analyzed. It becomes transparent that the evaluation of the effect of immigration policy is a particularly complex task since it requires unusually strong assumptions to hold a priori. These assumptions and possible reasons for their failure are discussed in detail. It is clarified that any violation of these assumptions renders the interpretation of the policy effects invalid. Finally, these insights are utilized for a critical review of the received literature.