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Trade Policy and Illegal Immigration

In: International Trade and Economic Dynamics

Author

Listed:
  • Woodland Alan

    (University of Sydney, NSW 2006)

  • Chisata Yoshida

    (University of Sydney, NSW 2006)

Abstract

We develop a general equilibrium two-country model in which the home and foreign countries trade two final goods and legal immigration is restricted. International trade is distorted via tariffs imposed by both countries. Foreign migrants attempt illegally entry to the home country but face a probability of detection and arrest by border patrol of the home country. The primary concern is with the interaction between tariff policy and illegal immigration. Tariff settings affect the real wages that illegal immigrants can attract and so have an influence on the amount of illegal immigration. Conversely, the existence of illegal immigrants can influence the effectiveness of changes in tariffs. Our analysis attempts to draw out the important interactions between tariff policy and illegal immigration. We establish conditions under which unilateral and bilateral tariff reforms reduce successful illegal immigration, and determine the welfare implications of these policy changes. We conclude that the mutual liberalization of trade does not necessarily reduce successful illegal immigration.

Suggested Citation

  • Woodland Alan & Chisata Yoshida, 2009. "Trade Policy and Illegal Immigration," Springer Books, in: Takashi Kamihigashi & Laixun Zhao (ed.), International Trade and Economic Dynamics, pages 101-119, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-78676-4_11
    DOI: 10.1007/978-3-540-78676-4_11
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