Welfare effects of illegal immigration
This paper analyzes the welfare effect of illegal immigration on the host country within a dynamic general equilibrium framework and shows that it is positive for two reasons. First, immigrants are paid less than their marginal product and second, following an increase in immigration, domestic households find it optimal to increase their holdings of capital. It is also shown that dynamic inefficiency may arise, despite the fact that the model is of the Ramsey type. Nevertheless, the introduction of a minimum wage, which leads to job competition between domestic unskilled workers and immigrants reverses all of the above results.
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- Gil S. Epstein & Odelia Heizler, 2007.
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CReAM Discussion Paper Series
0708, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
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- Hazari, Bharat R. & Sgro, Pasquale M., 2003.
"The simple analytics of optimal growth with illegal migrants,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 28(1), pages 141-151, October.
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"Growth and social security: the role of human capital,"
European Journal of Political Economy,
Elsevier, vol. 16(4), pages 673-683, November.
- Alexander Kemnitz & Berthold U. Wigger, 2000. "Growth and Social Security: The Role of Human Capital," CSEF Working Papers 33, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
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- Catalina Amuedo-Dorantes & Susan Pozo, 2006. "Remittances as insurance: evidence from Mexican immigrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 227-254, June.
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