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Reducing Illegal Migrants in the U.S.: A Dynamic CGE Analysis

  • Peter B. Dixon
  • Martin Johnson
  • Maureen T. Rimmer

We use an economy-wide model to analyze the effects of three broad programs to reduce illegal immigrants in U.S. employment: tighter border security; taxes on employers; and vigorous prosecution of employers. After looking at macroeconomic, industry and occupational effects, we decompose the welfare effect for legal residents into six parts covering changes in: producer surplus and illegal wage rates; skilled employment opportunities for natives; aggregate capital; aggregate legal employment; the terms of trade; and public expenditure. The type of program matters. Our analysis suggests a prima facie case in favor of taxes on employers.

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Paper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-183.

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Date of creation: Jul 2008
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Handle: RePEc:cop:wpaper:g-183
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  1. Angelucci, Manuela, 2005. "U.S. Border Enforcement and the Net Flow of Mexican Illegal Migration," IZA Discussion Papers 1642, Institute for the Study of Labor (IZA).
  2. Gordon H. Hanson & Craig McIntosh, 2007. "The Great Mexican Emigration," NBER Working Papers 13675, National Bureau of Economic Research, Inc.
  3. Ottaviano, Gianmarco I. P. & Peri, Giovanni, 2007. "Rethinking the effects of immigration on wages," HWWI Research Papers 3-8, Hamburg Institute of International Economics (HWWI).
  4. Boeters, Stefan & Böhringer, Christoph & Feil, Michael, 2002. "Taxation and unemployment: an applied general equilibrium approach for Germany," ZEW Discussion Papers 02-39, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Dixon, Peter B. & Pearson, K.R. & Picton, Mark R. & Rimmer, Maureen T., 2005. "Rational expectations for large CGE models: A practical algorithm and a policy application," Economic Modelling, Elsevier, vol. 22(6), pages 1001-1019, December.
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