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Self-Interested Governments, Unionization, and Legal and Illegal Immigration

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Author Info
Tapio Palokangas () (Department of Economics, University of Helsinki, Helsinki, Finland)

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Abstract

This paper examines an economy with following properties. Attempts to restrain illegal immigration incur costs. Illegal workers can work only in the competitive sector. Workers and employers bargain over wages in the unionized sector and lobby the government for immigration policy and workers’ bargaining power. The main findings are as follows. If the government can determine legal immigration, then it expropriates rents from labor unions. In that case, neither workers nor employers are worse off, if legal immigration is increased by an international agreement. High per worker public spending involves border enforcement and the protection of union power.

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Publisher Info
Article provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its journal AUCO Czech Economic Review.

Volume (Year): 2 (2008)
Issue (Month): 1 (March)
Pages: 007-020
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Handle: RePEc:fau:aucocz:au2008_007

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Related research
Keywords: immigration lobbying labor unions menu auction

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

References listed on IDEAS
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  1. Myers, Gordon M. & Papageorgiou, Yorgos Y., 2000. "Immigration control and the welfare state," Journal of Public Economics, Elsevier, vol. 75(2), pages 183-207, February. [Downloadable!] (restricted)
    Other versions:
  2. Winter-Ebmer, Rudolf & Zimmermann, Klaus F., 1998. "East-West Trade and Migration: The Austro-German Case," IZA Discussion Papers 02, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Hillman, Arye L. & Weiss, Avi, 1999. "A theory of permissible illegal immigration," European Journal of Political Economy, Elsevier, vol. 15(4), pages 585-604, November. [Downloadable!] (restricted)
  4. Olivier Blanchard & Francesco Giavazzi, 2003. "Macroeconomic Effects Of Regulation And Deregulation In Goods And Labor Markets," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 879-907, August. [Downloadable!] (restricted)
    Other versions:
  5. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September. [Downloadable!] (restricted)
    Other versions:
  6. Gordon H. Hanson & Antonio Splimbergo, 1999. "Political Economy, Sectoral Shocks, and Border Enforcement," NBER Working Papers 7315, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies. [Downloadable!]
    Other versions:
  8. Jorge G. Gonzalez, 1994. "Illegal Immigration In The Presence Of Labor Unions," International Economic Journal, Korean International Economic Association, vol. 8(2), pages 57-70, June. [Downloadable!] (restricted)
  9. Helmut Hofer & Peter Huber, 2003. "Wage and Mobility Effects of Trade and Migration on the Austrian Labour Market," Empirica, Springer, vol. 30(2), pages 107-125, June. [Downloadable!] (restricted)
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  10. Jim Dolmas & Gregory W. Huffman, 2004. "On The Political Economy Of Immigration And Income Redistribution," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1129-1168, November. [Downloadable!] (restricted)
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  11. J. Amegashie, 2004. "A political economy model of immigration quotas," Economics of Governance, Springer, vol. 5(3), pages 255-267, November. [Downloadable!] (restricted)
  12. Palokangas, Tapio, 2003. "The political economy of collective bargaining," Labour Economics, Elsevier, vol. 10(2), pages 253-264, April. [Downloadable!] (restricted)
    Other versions:
  13. Andrea Gavosto & Alessandra Venturini & Claudia Villosio, 1999. "Do Immigrants Compete with Natives?," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 13(3), pages 603-621, 09. [Downloadable!] (restricted)
  14. De New, John P & Zimmermann, Klaus F, 1994. "Native Wage Impacts of Foreign Labor: A Random Effects Panel Analysis," Journal of Population Economics, Springer, vol. 7(2), pages 177-92.
    Other versions:
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