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Employer Sanctions, Illegal Migration and Welfare

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  • Munirul H Nabin
  • Pasquale M Sgro

    ()

Abstract

Despite 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 Info

Paper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Economics Series with number 2010_01.

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Date of creation: 09 Feb 2010
Date of revision:
Handle: RePEc:dkn:econwp:eco_2010_01

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Related research

Keywords: Illegal Migrants; Vigilance; Cournot Competition and Welfare;

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References

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  17. Entorf, Horst, 2000. "Rational migration policy should tolerate non-zero illegal migration flows: Lessons from modelling the market for illegal migration," W.E.P. - Würzburg Economic Papers 23, University of Würzburg, Chair for Monetary Policy and International Economics.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Employer Sanctions, Illegal Migration and Welfare
    by Ariel Goldring in Free Market Mojo on 2010-03-03 08:17:08

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