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Minimum Wages and the Creation of Illegal Migration


  • Epstein, Gil S.

    () (Bar-Ilan University)

  • Heizler (Cohen), Odelia

    () (Academic College of Tel-Aviv Yaffo)


In this paper, we explore employers' decisions regarding the employment of legal and illegal immigrants in the presence of endogenous adjustment cost, minimum wages and an enforcement budget. We show that increasing the employment of legal foreign workers will increase the number of illegal immigrants which will replace the employment of the local population and thus creating illegal migration.

Suggested Citation

  • Epstein, Gil S. & Heizler (Cohen), Odelia, 2013. "Minimum Wages and the Creation of Illegal Migration," IZA Discussion Papers 7220, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7220

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    References listed on IDEAS

    1. Gil S. Epstein & Odelia Heizler, 2007. "Illegal Migration, Enforcement and Minimum Wage," CReAM Discussion Paper Series 0708, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    2. Gil S. Epstein, 2003. "Labor Market Interactions Between Legal and Illegal Immigrants," Review of Development Economics, Wiley Blackwell, vol. 7(1), pages 30-43, February.
    3. Paul Levine, 1999. "The welfare economics of immigration control," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(1), pages 23-43.
    4. Avi Weiss & Arye L. Hillman & Gil S. Epstein, 1999. "Creating illegal immigrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(1), pages 3-21.
    5. Faria, Joao Ricardo & Levy, Amnon, 2003. "Illegal Immigration and Migrant Networks: Is There an Optimal Immigration Quota Policy?," Economics Working Papers wp03-08, School of Economics, University of Wollongong, NSW, Australia.
    6. Devillanova, Carlo, 2008. "Social networks, information and health care utilization: Evidence from undocumented immigrants in Milan," Journal of Health Economics, Elsevier, vol. 27(2), pages 265-286, March.
    7. Faini,Riccardo C. & de Melo,Jaime & Zimmermann,Klaus (ed.), 1999. "Migration," Cambridge Books, Cambridge University Press, number 9780521662338, May.
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    More about this item


    foreign worker; illegal immigration; minimum wages;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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