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Illegal Immigration and Resource Allocation

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  • Djajic, Slobodan

Abstract

This paper studies the effects of illegal immigration and the associated expansion of the underground economy on the allocation of resources, commodity prices, and wages of workers, both in the short run (when occupational mobility is restricted) and in the long run (when the skill-composition of the labor force is endogenous). The paper goes on to consider some of the fiscal implications of illegal immigration and the related expansion of underground activity. Effects of sanctions against employers hiring illegal aliens and measures to legalize the status of clandestine foreign workers are also examined. Copyright 1997 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Djajic, Slobodan, 1997. "Illegal Immigration and Resource Allocation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 97-117, February.
  • Handle: RePEc:ier:iecrev:v:38:y:1997:i:1:p:97-117
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    References listed on IDEAS

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    1. Horstmann, Ignatius J & Markusen, James R, 1987. "Strategic Investments and the Development of Multinationals," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 109-121, February.
    2. Motta, Massimo, 1992. "Multinational firms and the tariff-jumping argument : A game theoretic analysis with some unconventional conclusions," European Economic Review, Elsevier, vol. 36(8), pages 1557-1571, December.
    3. Smith, Alasdair, 1987. "Strategic investment, multinational corporations and trade policy," European Economic Review, Elsevier, vol. 31(1-2), pages 89-96.
    4. V.N. Balasubramanyam & David Greenaway, 1992. "Economic Integration and Foreign Direct Investment: Japanese Investment in the EC," Journal of Common Market Studies, Wiley Blackwell, vol. 30(2), pages 175-194, June.
    5. Rowthorn, R E, 1992. "Intra-industry Trade and Investment under Oligopoly: The Role of Market Size," Economic Journal, Royal Economic Society, vol. 102(411), pages 402-414, March.
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    Cited by:

    1. Epstein, Gil S & Hillman, Arye L., 2000. "Social Harmony At The Boundaries Of The Welfare State: Immigrants And Social Transfers," CEPR Discussion Papers 2414, C.E.P.R. Discussion Papers.
    2. Bandyopadhyay, Subhayu & Pinto, Santiago M., 2017. "Unauthorized immigration and fiscal competition," European Economic Review, Elsevier, vol. 92(C), pages 283-305.
    3. Subhayu Bandyopadhyay & Howard J. Wall, 2010. "Immigration and Outsourcing: A General-Equilibrium Analysis," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 433-446, August.
    4. Djajić, Slobodan & Vinogradova, Alexandra, 2013. "Undocumented migrants in debt," Labour Economics, Elsevier, vol. 21(C), pages 15-24.
    5. Javier Ferri & Antonio G. GÛmez-Plana & Joan MartÌn-Montaner, "undated". "International inmigration and mobility across sectors: an exploration of alternative scenarios for Spain," Studies on the Spanish Economy 124, FEDEA.
    6. Jean-Marie Grether & Jaime de Melo & Tobias Müller, 2015. "The Political Economy of International Migration in a Ricardo–Viner Model," World Scientific Book Chapters,in: Developing Countries in the World Economy, chapter 17, pages 411-437 World Scientific Publishing Co. Pte. Ltd..
    7. Carmen Camacho & Fabio Mariani & Luca Pensieroso, 2017. "Illegal immigration and the shadow economy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(6), pages 1050-1080, December.
    8. Hillman, Arye L. & Weiss, Avi, 1999. "A theory of permissible illegal immigration," European Journal of Political Economy, Elsevier, vol. 15(4), pages 585-604, November.
    9. Mayr, Karin & Minter, Steffen & Krieger, Tim, 2012. "Policies on illegal immigration in a federation," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 153-165.
    10. Harry P. Bowen & Jennifer Pédussel Wu, 2013. "Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence," Southern Economic Journal, Southern Economic Association, vol. 80(2), pages 366-384, October.
    11. 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.
    12. Gordon H. Hanson & Antonio Spilimbergo, 2001. "Political economy, sectoral shocks, and border enforcement," Canadian Journal of Economics, Canadian Economics Association, vol. 34(3), pages 612-638, August.
    13. Jesús Clemente & Gemma Larramona, 2012. "Can a legalization programme for immigrants generate conflict among natives?," Chapters,in: Migration Impact Assessment, chapter 11, pages 365-386 Edward Elgar Publishing.
    14. Entorf, Horst, 2000. "Rational Migration Policy Should Tolerate Non-Zero Illegal Migration Flows: Lessons from Modelling the Market for Illegal Migration," IZA Discussion Papers 199, Institute for the Study of Labor (IZA).
    15. Scott Baker, 2013. "Effects of Immigrant Legalization on Crime: The 1986 Immigration Reform and Control Act," Discussion Papers 12-012, Stanford Institute for Economic Policy Research.
    16. Gaytan-Fregoso, Helena & Lahiri, Sajal, 2000. "Foreign aid and illegal immigration," Journal of Development Economics, Elsevier, vol. 63(2), pages 515-527, December.
    17. Katherine Cuff & Nicolas Marceau & Steeve Mongrain & Joanne Roberts, 2009. "Optimal Policies and the Informal Sector," Department of Economics Working Papers 2009-14, McMaster University.
    18. Bandyopadhyay, Subhayu & Bandyopadhyay, Sudeshna Champati, 1998. "Illegal immigration: a supply side analysis," Journal of Development Economics, Elsevier, vol. 57(2), pages 343-360.
    19. Tim Krieger & Steffen Minter, 2007. "Immigration amnesties in the southern EU member states - a challenge for the entire EU?," Working Papers CIE 6, Paderborn University, CIE Center for International Economics.
    20. Liu, Xiangbo, 2010. "On the macroeconomic and welfare effects of illegal immigration," Journal of Economic Dynamics and Control, Elsevier, vol. 34(12), pages 2547-2567, December.
    21. 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.
    22. Alessandra Venturini & Gil S. Epstein, 2006. "Migration, effort, and voter sentiment towards temporary migration," CHILD Working Papers wp18_06, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    23. Karlson, Stephen H. & Katz, Eliakim, 2003. "A positive theory of immigration amnesties," Economics Letters, Elsevier, vol. 78(2), pages 231-239, February.
    24. de Melo, Jaime & Miguet, Florence & Müller, Tobias, 2002. "The Political Economy of EU Enlargement: Lessons from Switzerland," CEPR Discussion Papers 3449, C.E.P.R. Discussion Papers.

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