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The role of capital mobility in illegal immigration policy

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Author Info

  • Subhayu Bandyopadhyay
  • Sudeshna Bandyopadhyay

Abstract

This paper analyzes the effectiveness of enforcement in controlling illegal immigration in two scenarios, capital mobility and capital immobility in the host nation (for illegal immigrants). The source nation is assumed throughout to have immobility of capital. We show that the net enforcement expenditure is higher (lower) in the presence of capital mobility if the host nation is an importer (exporter) of capital at the target immigration level. Furthermore, we show that if the host nation is an exporter of capital at the point of zero enforcement (unrestricted immigration), it must have lower enforcement expenditure (compared to capital immobility) for any illegal immigration target. If it is an importer of capital at zero enforcement, there is some ambiguity. National income must be higher (lower) under capital mobility (compared to immobility) if the host nation is an importer (exporter) of capital at the target immigration level. The analysis is extended to consider endogenous determination of optimal immigration level. Under capital mobility, for a capital exporting nation, the optimal enforcement and the national income levels are higher, while the optimal immigration level is lower.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/09638190600690879
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 15 (2006)
Issue (Month): 2 ()
Pages: 173-189

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Handle: RePEc:taf:jitecd:v:15:y:2006:i:2:p:173-189

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Related research

Keywords: Illegal immigration; capital mobility; optimal enforcement;

References

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  1. Gordon H. Hanson & Antonio Spilimbergo, 1996. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," IDB Publications 6798, Inter-American Development Bank.
  2. Subhayu Bandyopadhyay, 2006. "Illegal Immigration and Second-best Import Tariffs," Review of International Economics, Wiley Blackwell, vol. 14(1), pages 93-103, 02.
  3. Bond, Eric W. & Chen, Tain-Jy, 1987. "The welfare effects of illegal immigration," Journal of International Economics, Elsevier, vol. 23(3-4), pages 315-328, November.
  4. Gordon H. Hanson & Antonio Splimbergo, 1999. "Political Economy, Sectoral Shocks, and Border Enforcement," NBER Working Papers 7315, National Bureau of Economic Research, Inc.
  5. Djajic, Slobodan, 1987. "Illegal aliens, unemployment and immigration policy," Journal of Development Economics, Elsevier, vol. 25(1), pages 235-249, February.
  6. Gaytan-Fregoso, Helena & Lahiri, Sajal, 2000. "Foreign aid and illegal immigration," Journal of Development Economics, Elsevier, vol. 63(2), pages 515-527, December.
  7. Ethier, Wilfred J, 1986. "Illegal Immigration," American Economic Review, American Economic Association, vol. 76(2), pages 258-62, May.
  8. Bandyopadhyay, Subhayu & Bandyopadhyay, Sudeshna Champati, 1998. "Illegal immigration: a supply side analysis," Journal of Development Economics, Elsevier, vol. 57(2), pages 343-360.
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