On the welfare impacts of an immigration amnesty
AbstractThis paper aims to assess the effects of an immigration amnesty on agents' welfare by using a simple two-period overlapping generations model. Given that illegal immigrants play a role in the economy even before being regularized, an amnesty differs from new immigration. In the presence of labor market discrimination, capital holders are harmed as the acquisition of legal status increases the wage bill that they pay. The net fiscal effect strongly depends on the discrimination that illegal workers face ex ante. A calibration of the model on Germany and the United Kingdom highlights overall limited economic consequences of amnesty which can be contrasted to the effects of deportation and new legal immigration. In particular, when public welfare expenditures are low, amnesty and new immigration can increase native's welfare in the long run while deportation might harm less-educated agents.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2012010.
Date of creation: 09 May 2012
Date of revision:
illegal immigration; amnesty; regularization; discrimination;
Find related papers by JEL classification:
- F29 - International Economics - - International Factor Movements and International Business - - - Other
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
- J79 - Labor and Demographic Economics - - Labor Discrimination - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-05 (All new papers)
- NEP-DGE-2012-06-05 (Dynamic General Equilibrium)
- NEP-LAB-2012-06-05 (Labour Economics)
- NEP-MIG-2012-06-05 (Economics of Human Migration)
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