This paper proposes a reputation mechanism that simultaneously addresses two central challenges in temporary migration programs – information and compliance. With this reputation mechanism, guest workers’ behavior and performance in each host country – including obedience to local laws and timely exit – are recorded and scored in a global repository. Acquired positive reputation in one country can then be used for further admission options among multiple participating host countries over a longer period of time. The shift to a repeat game framework takes place on the global level without compromising the interest of host governments in the transience of its guest workers. By utilizing accumulated information the reputation mechanism improves screening and enforcement processes and allows the implementation of less punitive domestic programs. The power of reputation can also be utilized to monitor employers’ behavior, thus incentivizing self-regulation by employers and enhancing migrants’ welfare.
WPS 04-17 (pdf)