Welfare effects of illegal immigration
AbstractThis paper analyzes the welfare effect of illegal immigration on the host country within a dynamic general equilibrium framework and shows that it is positive for two reasons. First, immigrants are paid less than their marginal product and second, following an increase in immigration, domestic households find it optimal to increase their holdings of capital. It is also shown that dynamic inefficiency may arise, despite the fact that the model is of the Ramsey type. Nevertheless, the introduction of a minimum wage, which leads to job competition between domestic unskilled workers and immigrants reverses all of the above results.
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Bibliographic InfoPaper provided by Department of Economics, University of Macedonia in its series Discussion Paper Series with number 2007_01.
Date of creation: Dec 2007
Date of revision: Dec 2007
Economic Growth; Illegal Immigration;
Other versions of this item:
- F2 - International Economics - - International Factor Movements and International Business
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-12 (All new papers)
- NEP-DGE-2008-01-12 (Dynamic General Equilibrium)
- NEP-LAB-2008-01-12 (Labour Economics)
- NEP-MIG-2008-01-12 (Economics of Human Migration)
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