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Illegal Migration, Enforcement and Minimum Wage

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Author Info

  • Epstein, Gil S.

    ()
    (Bar-Ilan University)

  • Heizler (Cohen), Odelia

    ()
    (Academic College of Tel-Aviv Yaffo)

Abstract

This paper examines the connection between illegal migration, minimum wages and enforcement policy. We first explore the employers’ decision regarding the employment of illegal migrants in the presence of an effective minimum wage. We show that the employers’ decision depends on the wage gap between those of the legal and illegal workers and on the penalty for employing illegal workers. We consider the effects a change in the minimum wage has on the employment of illegal immigrants and local workers. We conclude by considering the optimal migration policy taking into consideration social welfare issues.

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File URL: http://ftp.iza.org/dp2830.pdf
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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2830.

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Length: 31 pages
Date of creation: Jun 2007
Date of revision:
Publication status: published in: Research in Labor Economics, 2008, 28, 197-224
Handle: RePEc:iza:izadps:dp2830

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Keywords: minimum wage; migration policy; illegal immigration; interest groups;

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References

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  1. Antonio Spilimbergo & Gordon H. Hanson, 1999. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," American Economic Review, American Economic Association, vol. 89(5), pages 1337-1357, December.
  2. Benhabib, Jess, 1996. "On the political economy of immigration," European Economic Review, Elsevier, vol. 40(9), pages 1737-1743, December.
  3. Jaime MELO DE & Jean Marie GRETHER & Jean Claude MULLER, 2000. "The Political Economy of International Migration in a Ricardo-Viner Model," Working Papers 200021, CERDI.
  4. ?gel Solano Garc?, 2004. "Does illegal immigration empower rightist parties?," UFAE and IAE Working Papers 614.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  5. Richard Dickens & Stephen Machin & Alan Manning, 1994. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," CEP Discussion Papers dp0183, Centre for Economic Performance, LSE.
  6. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
  7. Slobodan Djajic, 1999. "Dynamics of immigration control," Journal of Population Economics, Springer, vol. 12(1), pages 45-61.
  8. Mark Guzman & Joseph Haslag & Pia Orrenius, 2008. "On the determinants of optimal border enforcement," Economic Theory, Springer, vol. 34(2), pages 261-296, February.
  9. Gil S. Epstein & Avi Weiss, 2009. "The Why, When and How of Immigration Amnesties," Working Papers 2009-24, Department of Economics, Bar-Ilan University.
  10. J. Amegashie, 2004. "A political economy model of immigration quotas," Economics of Governance, Springer, vol. 5(3), pages 255-267, November.
  11. Avi Weiss & Arye L. Hillman & Gil S. Epstein, 1999. "Creating illegal immigrants," Journal of Population Economics, Springer, vol. 12(1), pages 3-21.
  12. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May.
  13. Ethier, Wilfred J, 1986. "Illegal Immigration: The Host-Country Problem," American Economic Review, American Economic Association, vol. 76(1), pages 56-71, March.
  14. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-94, Sept./Oct.
  15. George J. Borjas, 1994. "The Economic Benefits from Immigration," NBER Working Papers 4955, National Bureau of Economic Research, Inc.
  16. Cobb-Clark, Deborah A & Shiells, Clinton R & Lowell, B Lindsay, 1995. "Immigration Reform: The Effects of Employer Sanctions and Legalization on Wages," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 472-98, July.
  17. Gaytan-Fregoso, Helena & Lahiri, Sajal, 2000. "Foreign aid and illegal immigration," Journal of Development Economics, Elsevier, vol. 63(2), pages 515-527, December.
  18. Epstein, Gil S. & Nitzan, Shmuel, 2005. "The Struggle over Migration Policy," IZA Discussion Papers 1533, Institute for the Study of Labor (IZA).
  19. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
  20. Chiswick, Barry R, 1988. "Illegal Immigration and Immigration Control," Journal of Economic Perspectives, American Economic Association, vol. 2(3), pages 101-15, Summer.
  21. Yaniv, Gideon, 2001. "Minimum Wage Noncompliance and the Employment Decision," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 596-603, July.
  22. Epstein, Gil S. & Hillman, Arye L., 2003. "Unemployed immigrants and voter sentiment in the welfare state," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1641-1655, August.
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Citations

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Cited by:
  1. Gil S. Epstein & Odelia Heizler (Cohen), 2013. "Minimum Wages and the Creation of Illegal Migration," Working Papers 2013-02, Department of Economics, Bar-Ilan University.
  2. Theodore Palivos, 2009. "Welfare effects of illegal immigration," Journal of Population Economics, Springer, vol. 22(1), pages 131-144, January.
  3. Cuff, Katherine & Marceau, Nicolas & Mongrain, Steeve & Roberts, Joanne, 2011. "Optimal Policies with an Informal Sector," Journal of Public Economics, Elsevier, vol. 95(11), pages 1280-1291.
  4. Katherine Cuff & Nicolas Marceau & Steeve Mongrain & Joanne Roberts, 2009. "Optimal Policies and the Informal Sector," Department of Economics Working Papers 2009-14, McMaster University.

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