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Reducing illegal immigration to South Africa: A dynamic CGE analysis


  • Heinrich R. Bohlmann

    () (Department of Economics, University of Pretoria)


South African authorities are attempting to limit inflows of illegal immigrants. Evidence for the United States presented in Dixon et al (2011) suggests that a policy-induced reduction in labour supply from illegal immigrants generates a welfare loss for legal residents. I use a similar labour market mechanism within a dynamic CGE model for South Africa, but take into consideration a number of well-known facts about the local economy. With high unemployment rates among low skilled workers and a legal minimum wage in place, I find a net gain in employment and welfare for legal residents in South Africa when reducing the inflow of illegal immigrants.

Suggested Citation

  • Heinrich R. Bohlmann, 2012. "Reducing illegal immigration to South Africa: A dynamic CGE analysis," Working Papers 201213, University of Pretoria, Department of Economics.
  • Handle: RePEc:pre:wpaper:201213

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    References listed on IDEAS

    1. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October.
    2. John Page & Sonia Plaza, 2006. "Migration Remittances and Development: A Review of Global Evidence," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 245-336, December.
    3. Peter B. Dixon & Maureen T. Rimmer, 2010. "Johansen's contribution to CGE modelling: originator and guiding light for 50 years," Centre of Policy Studies/IMPACT Centre Working Papers g-203, Victoria University, Centre of Policy Studies/IMPACT Centre.
    4. Haroon Bhorat & Halton Cheadle, 2009. "Labour Reform in South Africa: Measuring Regulation and a Synthesis of Policy Suggestions," Working Papers 09139, University of Cape Town, Development Policy Research Unit.
    5. Parsons, Christopher R. & Skeldon, Ronald & Walmsley, Terrie L. & Winters, L. Alan, 2007. "Quantifying international migration : a database of bilateral migrant stocks," Policy Research Working Paper Series 4165, The World Bank.
    6. Robert Pollin & Gerald Epstein & James Heintz & Léonce Ndikumana, 2006. "An Employment-targeted Economic Programme for South Africa," Country Study 1, International Policy Centre for Inclusive Growth.
    7. Peter B. Dixon & Martin Johnson & Maureen T. Rimmer, 2011. "Economy‐Wide Effects Of Reducing Illegal Immigrants In U.S. Employment," Contemporary Economic Policy, Western Economic Association International, vol. 29(1), pages 14-30, January.
    8. Rulof Burger & Derek Yu, 2006. "Wage trends in post-apartheid South Africa: Constructing an earnings series from household survey data," Working Papers 10/2006, Stellenbosch University, Department of Economics.
    9. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The labour market impact of immigration," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 478-495, Autumn.
    10. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
    11. Dale Mortensen & Eva Nagypal, 2007. "More on Unemployment and Vacancy Fluctuations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 327-347, July.
    12. Neumark, David & Wascher, William L., 2007. "Minimum Wages and Employment," Foundations and Trends(R) in Microeconomics, now publishers, vol. 3(1–2), pages 1-182, March.
    13. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
    14. Nickell, Stephen J, 1990. "Unemployment: A Survey," Economic Journal, Royal Economic Society, vol. 100(401), pages 391-439, June.
    15. Martin Ruhs, 2008. "Economic research and labour immigration policy," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 404-427, Autumn.
    16. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
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    More about this item


    Illegal immigration; dynamic CGE modelling;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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