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

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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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Bibliographic 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;

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  1. Olivier Blanchard & Francesco Giavazzi, . "Macroeconomic effects of regulation and deregulation in goods and labor markets," Working Papers 187, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  2. Hofer, Helmut & Huber, Peter, 2001. "Wage and Mobility Effects of Trade and Migration on the Austrian Labour Market," Economics Series 97, Institute for Advanced Studies.
  3. 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.
  4. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
  5. Hanson, G.H. & Spilimbergo, A., 1999. "Political Economy, Sectoral Shocks, and Border Enforcement," Working Papers 449, Research Seminar in International Economics, University of Michigan.
  6. J. Amegashie, 2004. "A political economy model of immigration quotas," Economics of Governance, Springer, vol. 5(3), pages 255-267, November.
  7. 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.
  8. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies.
  9. Winter-Ebmer, Rudolf & Zimmermann, Klaus F., 1998. "East-West Trade and Migration: The Austro-German Case," IZA Discussion Papers 2, Institute for the Study of Labor (IZA).
  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.
  11. Palokangas, Tapio, 2003. "The political economy of collective bargaining," Labour Economics, Elsevier, vol. 10(2), pages 253-264, April.
  12. 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.
  13. Andrea Gavosto & Alessandra Venturini & Claudia Villosio, 1999. "Do Immigrants Compete with Natives?," LABOUR, CEIS, vol. 13(3), pages 603-621, 09.
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