Little is known about the welfare implications and sustainability of coordinated immigration policies, unlike trade, fiscal or monetary policies. We develop a model of international migration in which countries have the choice between setting borders independently or joining a migration union which ensures free labor mobility between union members. The model yields an open- or closed-border Nash equilibrium when returns to labor are constant or diminishing, respectively. We prove that migration unions arise naturally between Asymmetric countries. We find that greater preference for migration, high returns to labor, and uniform productivity and population sizes make migration unions more likely to arise or enlarge. The enlargement of migration unions can benefit people regardless of their residence. Additionally, we show that the rigidity of migration policies in the short run may contribute to the credibility of migration unions.

Existence of migration unions guaranteeing free labor mobility between member countries is not consistent with non-cooperative policy-making. I propose a novel multi-country model of international negotiations to provide a rationale behind the existence of migration unions. I argue that migration unions are politically viable when countries can anticipate and share joint coordination benefits. I propose alternative bargaining schemes and validate our arguments by studying the enlargement of the European Union in 2004. I find that international transfers had to be in place for the enlargement to be collectively supported. Additionally, we show that transfers grow with the asymmetry between countries. I show that eastern and central European countries are the main winners from the EU enlargement. I find Germany and new member states to sponsor the European integration in the amount of 4-26 pp. of the gross domestic product each. Additionally, I quantify welfare gains from the withdrawal from and accession to the European Union. I find an enlargement by a single country to benefit union members by 1.9-2.2% and an analogous withdrawal to decrease their welfare  by 2-2.8%.

In this paper, I quantify welfare gains from complete labor liberalization (open borders) when the level and skill composition of immigration affects support for populist parties and productivity growth. I develop a general equilibrium model endogenizing migration and voting decision of native population. I estimate that the level of immigration and the low-skilled immigration increases the share of pro-populist votes at the destination. I quantify economic effects of labor liberalization based on the estimates of aspired migration. As a result, immigrant stocks increase by 149%, populism in the world increases by 54% and leads to a 7% decrease in the average GDP per capita due to a productivity drop, but a 17% increase in the total world GDP due to labor reallocation to centers of productivity. I find that populism externality contributes to the decrease in the share of immigrants among residents by 17% and to the increase in the share of low-skilled labor among migrants by 0.7%. The quantitative results show that populism congests the economic gains and political viability of the free labor mobility.