In a recent statement, IBEC suggested that asylum seekers be allowed to work while their applications for refugee status are being processed. Such a liberal view on the issue of immigration is typical of employers' organisations.

But what weight should be given to the views of an employers' confederation when designing immigration policy for the Republic? One of IBEC's main functions is to represent its members' interest in the policy-formation process. Obviously, employers' most basic interest is in profit and, therefore, any policy that increases their profits will generally be supported by IBEC.

When it comes to immigration policy, employers' profits are best served by a steady supply of labour. Like any resource, when the supply of labour is tight relative to demand, its price rises. To maintain lower wages - and hence higher profits - employers want to ensure that the supply of labour does not get too tight. Immigration is one way of ensuring a steady labour supply.

Of course, employers do not say that they want to keep downward pressure on wages by increasing labour supply through immigration. They put it in terms of skill shortages and people not being available. But from an economist's perspective, skill shortages are typically solved through increased wages.

There may well be very specific cases where individuals with required skills are not available but, in general, if wages rise far enough, employees become available.

Given IBEC's interest in increasing labour supply, it is clear why they are eager to see asylum seekers granted the right to work.

It is also likely that pressure from business has contributed to the number of work permits being issued to non-EU citizens, which has increased from around 4,000 in the mid-1990s to 18,000 last year. Clearly, the work-permit expansion has benefited business, as would the relaxation in regulations facing asylum seekers if it were introduced. But are these sensible policies from the national perspective?

Any discussion involving asylum seekers has many sensitive dimensions and so it is a difficult matter to write about. I always argue that the issue of asylum should be kept separate from economics.

Our approach to asylum seekers should be based on human rights considerations and not on the fact that our economy happens to be performing well. But as the issue of asylum seekers and work is currently being debated, it has to be addressed.

In the very short-term, implementing IBEC's call and allowing asylum seekers to work may be beneficial to the economy. But it is likely the Minister for Justice, Mr O'Donoghue, was correct when he claimed that such a policy would lead to an increased inflow of asylum seekers. Some argue that this can be overcome by restricting the new work arrangements to asylum seekers who are already here but a policy approach of that type rarely works.

In the US in the mid-1980s an amnesty was granted to illegal immigrants who had been in the country since before a specified time. I do not mean to suggest that asylum seekers are illegal immigrants because they are not. I simply want to use this example to show what happens when amnesty-type policies are introduced. At the time the amnesty was introduced, stronger enforcement measures against new illegals were also to be introduced.

The result of this joint amnesty/enforcement approach was a continued inflow of illegals partly because the enactment of one amnesty makes people expect that another one is likely. Thinking about tax amnesties in the Republic illustrates how rational this expectation can be.

The short-term view that characterises IBEC's position on asylum seekers can also be seen in the huge increase in the number of work permits being granted. These extra employees are a bonus to the economy now but we have to ask what will happen when the economy turns down.

As work permits are issued for one year, some might think that unemployed immigrants will leave. International experience says that this is not so. What is more likely is the development of a set of illegal immigrants with the corresponding characteristics of social exclusion.

Business's views on immigration serve their purposes well in the short-term - and those of the economy. But in an economic downturn, business may no longer have need for immigrant labour.

At that point, society will have to deal with the results of a short-sighted policy.

Dr Alan Barrett is an economist at the Economic and Social Research Institute