Employer Sanctions, Illegal Migration and Welfare
AbstractDespite border enforcement and penalties for firms that hire illegal migrants, the presence of illegal migrants in most economies still persists. This paper assumes a Ricardian economy and analyzes migration of illegal unskilled workers in a model of Cournot Duopoly where firms are producing homogenous and non-traded goods, and hiring illegal migrants. A two-stage simultaneous move game is set up: In stage 1, for a given technology and vigilance level, each individual firm will decide whether to hire illegal migrants. In stage 2, each firm will choose the Cournot output level. Using this structure, we demonstrate that hiring illegal migrants is not necessarily welfare-reducing for a given industry and furthermore the presence of illegal migrants creates more employment for domestic workers.
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Bibliographic InfoPaper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Economics Series with number 2010_01.
Date of creation: 09 Feb 2010
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Illegal Migrants; Vigilance; Cournot Competition and Welfare;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- O39 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-27 (All new papers)
- NEP-COM-2010-02-27 (Industrial Competition)
- NEP-MIG-2010-02-27 (Economics of Human Migration)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Employer Sanctions, Illegal Migration and Welfare
by Ariel Goldring in Free Market Mojo on 2010-03-03 08:17:08
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