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Illegal Immigration in a Heterogeneous Society

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  • Theodore Palivos
  • Chong K. Yip

Abstract

This paper examines the effects of illegal immigration in a neoclassical growth model with two groups of workers, skilled and unskilled. We show that although illegal immigration is a boon to a country as a whole, there are distributional effects, whose sign is in general ambiguous. This is because all sources of income of both groups are affected and some of these changes tend to move income in opposite directions. Nevertheless, a calibration exercise shows that the wealth distribution is likely to become more unequal as the number of illegal immigrants increases. We confirm most of our calibration results analytically in a small open economy version of the basic model.

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Bibliographic Info

Paper provided by Chinese University of Hong Kong, Department of Economics in its series Departmental Working Papers with number _188.

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Date of creation: Sep 2007
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Handle: RePEc:chk:cuhked:_188

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Cited by:
  1. Liu, Xiangbo, 2010. "On the macroeconomic and welfare effects of illegal immigration," Journal of Economic Dynamics and Control, Elsevier, vol. 34(12), pages 2547-2567, December.
  2. Carmelo Pierpaolo Parello, 2012. "Indeterminacy in a Dynamic Small Open Economy with International Migration," Working Papers 159, University of Rome La Sapienza, Department of Public Economics.
  3. Liu, Xiangbo, 2009. "On the Macroeconomic and Welfare Effects of Illegal Immigration," MPRA Paper 15469, University Library of Munich, Germany.
  4. Maria Sarigiannidou & Theodore Palivos, 2012. "A Modern Theory of Kuznets’ Hypothesis," Working Papers 201202, Texas Christian University, Department of Economics.

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