The main purpose of this paper is to analyse the impact of illegal migration on the optimal path of domestic (resident) consumption. We demonstrate two important results. First if illegal migrants and domestic labour are perfect substitutes, then illegal migration necessarily lowers the long run per capita consumption of domestic residents. Second, in the case where illegal migrants and domestic labour are imperfect substitutes, we were unable to unambiguously rank the long run per capita consumption of domestic residents with and without illegal migrants. To obtain an intuitive feel for this result, we use the Cobb-Douglas case. This established that for resident long term per capital consumption to fall, illegal migrants have to be greater than the domestic labour force – a highly unlikely empirical result. Hence, in this case we feel on the basis of the Cobb- Douglas example that illegal migrants will raise the long run per capita consumption of the domestic residents. The important message from a policy perspective is that if illegal migrants are to be allowed (not policed) then they should at least be imperfect substitutes for domestic labour.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number
189.
Length: 18 pages Date of creation: Jan 2002 Date of revision: Handle: RePEc:eab:macroe:189
Contact details of provider: Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200 Web page: http://www.eaber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Sam Engele).
Find related papers by JEL classification: R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business F22 - International Economics - - International Factor Movements and International Business - - - International Migration
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)