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Illegal Immigration and Second-best Import Tariffs

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  • Subhayu Bandyopadhyay

Abstract

A version of the small-union Meade model is presented to analyze the illegal immigration problem in the context of import tariffs. Two possible host nation objectives are considered: (i) to control the level of illegal immigration to a given target; or (ii) to choose an illegal immigration level that maximizes national welfare. Available policy instruments are import tariffs/subsidies, border, and internal enforcement levels. The second-best tariff on imports from the source nation (for illegal immigration) can be of either sign. It depends on the effect of the tariff on the wage rate and the pattern of substitutability in consumption. In scenario (ii), greater enforcement may be justified if it reduces labor inflow and thereby contracts the protected sector. If enforcement is too costly, tariff policy may substitute for it to exploit monopsony power in the labor market and to counter the distortionary effects of labor flows. Copyright © 2006 The Authors; Journal compilation © Blackwell Publishing Ltd. 2006.

Suggested Citation

  • Subhayu Bandyopadhyay, 2006. "Illegal Immigration and Second-best Import Tariffs," Review of International Economics, Wiley Blackwell, vol. 14(1), pages 93-103, February.
  • Handle: RePEc:bla:reviec:v:14:y:2006:i:1:p:93-103
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    Cited by:

    1. Subhayu Bandyopadhyay & Howard J. Wall, 2010. "Immigration and Outsourcing: A General-Equilibrium Analysis," Review of Development Economics, Wiley Blackwell, pages 433-446.
    2. Subhayu Bandyopadhyay & Dustin Chambers & Jonathan Munemo, 2012. "Foreign aid, illegal immigration, and host country welfare," Working Papers 2012-007, Federal Reserve Bank of St. Louis.
    3. Subhayu Bandyopadhyay & Ryo Takashima, 2005. "Trade Policy and Illegal Immigration," Working Papers 05-04 Classification- JEL, Department of Economics, West Virginia University.
    4. Subhayu Bandyopadhyay & Sudeshna Bandyopadhyay, 2006. "The role of capital mobility in illegal immigration policy," The Journal of International Trade & Economic Development, Taylor & Francis Journals, pages 173-189.
    5. Djajić, Slobodan & Mesnard, Alice, 2015. "Guest workers in the underground economy," Labour Economics, Elsevier, vol. 35(C), pages 53-62.
    6. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2009. "Revisiting the Informal Sector: A General Equilibrium Approach," MPRA Paper 52135, University Library of Munich, Germany.

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