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Illegal Immigration in a Heterogeneous Society

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Abstract

This paper examines the effects of illegal immigration in a neoclassical growth model with two groups of workers, skilled and unskilled. We show that although illegal immigration is a boon to a country as a whole, there are distributional effects, whose sign is in general ambiguous. This is because all sources of income of both groups are affected and some of these changes tend to move income in opposite directions. Nevertheless, a calibration exercise shows that the wealth distribution is likely to become more unequal as the number of illegal immigrants increases. We confirm most of our calibration results analytically in a small open economy version of the basic model.

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Bibliographic Info

Paper provided by Department of Economics, University of Macedonia in its series Discussion Paper Series with number 2007_02.

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Date of creation: Dec 2007
Date of revision: Dec 2007
Handle: RePEc:mcd:mcddps:2007_02

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Web page: http://www.uom.gr/index.php?tmima=3

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Keywords: Economic Growth; Illegal Immigration; Income Distribution;

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References

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  1. Joseph E. Stiglitz, 1967. "Distribution of Income and Wealth Among Individuals," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 238, Cowles Foundation for Research in Economics, Yale University.
  2. Chatterjee, Satyajit & Ravikumar, B., 1999. "Minimum Consumption Requirements: Theoretical And Quantitative Implications For Growth And Distribution," Macroeconomic Dynamics, Cambridge University Press, Cambridge University Press, vol. 3(04), pages 482-505, December.
  3. Ethier, Wilfred J, 1986. "Illegal Immigration," American Economic Review, American Economic Association, American Economic Association, vol. 76(2), pages 258-62, May.
  4. Djajic, Slobodan, 1987. "Illegal aliens, unemployment and immigration policy," Journal of Development Economics, Elsevier, Elsevier, vol. 25(1), pages 235-249, February.
  5. Woodland, Alan D. & Yoshida, Chisato, 2006. "Risk preference, immigration policy and illegal immigration," Journal of Development Economics, Elsevier, Elsevier, vol. 81(2), pages 500-513, December.
  6. Hazari, Bharat R. & Sgro, Pasquale M., 2003. "The simple analytics of optimal growth with illegal migrants," CEPREMAP Working Papers (Couverture Orange) 0301, CEPREMAP.
  7. Hazari, Bharat R & Sgro, Pasquale M, 2000. "Illegal Migration, Border Enforcement, and Growth," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 4(3), pages 258-67, October.
  8. Chatterjee, Satyajit, 1994. "Transitional dynamics and the distribution of wealth in a neoclassical growth model," Journal of Public Economics, Elsevier, Elsevier, vol. 54(1), pages 97-119, May.
  9. Kenji Kondoh, 2004. "International immigration and economic welfare in an efficiency wage model: The co-existence case of both legal and illegal foreign workers," Pacific Economic Review, Wiley Blackwell, Wiley Blackwell, vol. 9(1), pages 1-12, 02.
  10. Moy, Hon Man & Yip, Chong K., 2006. "The simple analytics of optimal growth with illegal migrants: A clarification," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 30(12), pages 2469-2475, December.
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Cited by:
  1. Liu, Xiangbo, 2010. "On the macroeconomic and welfare effects of illegal immigration," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 34(12), pages 2547-2567, December.
  2. Parello, Carmelo Pierpaolo, 2012. "Indeterminacy in a dynamic small open economy with international migration," MPRA Paper 40013, University Library of Munich, Germany.
  3. Maria Sarigiannidou & Theodore Palivos, 2012. "A Modern Theory of Kuznets’ Hypothesis," Working Papers, Texas Christian University, Department of Economics 201202, Texas Christian University, Department of Economics.
  4. Liu, Xiangbo, 2009. "On the Macroeconomic and Welfare Effects of Illegal Immigration," MPRA Paper 15469, University Library of Munich, Germany.

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