Illegal Immigration, Factor Substitution and Economic Growth
This paper develops a growth model with illegal immigration in which there exist two types of domestic labor, skilled and unskilled. These two types enter the production via a CES aggregator. In a similar manner, the paper also allows for the possibility of imperfect substitution between native and immigrant labor. Within such a framework it analyzes the e ects of an increase in immigration on the average capital stock, individual wages, asset holdings and the distribution of wealth. Contrary to previous results in the literature, the paper shows that illegal immigration may not necessarily make the distribution of wealth more unequal and unskilled labor worse o . This is so because the end results depend on the elasticities of substitution between di erent types of labor. Thus, assuming erroneously that immigrants and natives are perfect substitutes could lead to results that are not only over-estimated but also of the wrong sign.
References listed on IDEAS
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- Theodore Palivos & Chong Yip, 2010. "Illegal immigration in a heterogeneous labor market," Journal of Economics, Springer, vol. 101(1), pages 21-47, September.
- 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.
- Hazari, Bharat R. & Sgro, Pasquale M., 2003. "The simple analytics of optimal growth with illegal migrants," CEPREMAP Working Papers (Couverture Orange) 0301, CEPREMAP.
- Chris Papageorgiou & Marianne Saam, 2008.
"Two-level CES Production Technology in the Solow and Diamond Growth Models,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 110(1), pages 119-143, 03.
- Chris Papageorgiou & Marianne Saam, . "Two-Level CES Production Technology in the Solow and Diamond Growth Models," Departmental Working Papers 2005-07, Department of Economics, Louisiana State University.
- Giovanni Peri & Chad Sparber, 2009.
"Task Specialization, Immigration and Wages,"
91, University of California, Davis, Department of Economics.
- Giovanni Peri & Chad Sparber, 2008. "Task Specialisation, Immigration and Wages," Development Working Papers 252, Centro Studi Luca d'Agliano, University of Milano.
- Giovanni Peri & Chad Sparber, 2008. "Task Specialization, Immigration, and Wages," CReAM Discussion Paper Series 0802, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
- 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.
- Litina, Anastasia & Palivos, Theodore, 2010.
"The Behavior Of The Saving Rate In The Neoclassical Optimal Growth Model,"
Cambridge University Press, vol. 14(04), pages 482-500, September.
- Anastastia Litina & Theodore Palivos, 2008. "The Behaviour of the Saving Rate in the Neoclassical Optimal Growth Model," Discussion Paper Series 2008_05, Department of Economics, University of Macedonia, revised Jun 2008.
- Klump, Rainer & Preissler, Harald, 2000. " CES Production Functions and Economic Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 41-56, March.
- Theodore Palivos & Giannis Karagiannis, 2007.
"The elasticity of substitution as an engine of growth,"
Discussion Paper Series
2007_03, Department of Economics, University of Macedonia, revised Dec 2007.
- Palivos, Theodore & Karagiannis, Giannis, 2010. "The Elasticity Of Substitution As An Engine Of Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 14(05), pages 617-628, November.
- Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
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