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Illegal immigration and a heterogeneous labour force. When can quotas generate an internal conflict?

Author

Listed:
  • Gemma Larramona

    ()

  • Jesus Clemente

    ()

  • Pedro Garcia-Castrillo

    ()

Abstract

In this paper we analyze the effects on the welfare of heterogeneous native workers in the context of the presence of legal and illegal immigrants, and where the main instrument of economic policy takes the form of entry quotas. In the framework of a model of overlapping generations, we find that these effects are not monotonous. More particularly, we note that in certain circumstances the effects on the native workers of a change in the quota are opposite in nature, depending on whether or not these workers are qualified. The key aspect of this result is, on the one hand, the effect of illegal immigration on wages and, on the other, the part of income generated by the illegal immigrants that is appropriated by the natives for managing this “informal” labour market. Keywords: Illegal immigration; entry quotas; qualification. JEL: F22, J61,J68.

Suggested Citation

  • Gemma Larramona & Jesus Clemente & Pedro Garcia-Castrillo, 2004. "Illegal immigration and a heterogeneous labour force. When can quotas generate an internal conflict?," ERSA conference papers ersa04p125, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa04p125
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa04/PDF/125.pdf
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    References listed on IDEAS

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    1. Razin, Assaf & Sadka, Efraim, 2000. " Unskilled Migration: A Burden or a Boon for the Welfare State?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 463-479, June.
    2. Raquel Carrasco & Juan Jimeno & A. Ortega, 2008. "The effect of immigration on the labor market performance of native-born workers: some evidence for Spain," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(3), pages 627-648, July.
    3. Razin, Assaf & Sadka, Efraim & Swagel, Phillip, 2002. "Tax burden and migration: a political economy theory and evidence," Journal of Public Economics, Elsevier, vol. 85(2), pages 167-190, August.
    4. 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.
    5. Daveri, Francesco & Faini, Riccardo, 1999. "Where Do Migrants Go?," Oxford Economic Papers, Oxford University Press, vol. 51(4), pages 595-622, October.
    6. Jonathan Coppel & Jean-Christophe Dumont & Ignazio Visco, 2001. "Trends in Immigration and Economic Consequences," OECD Economics Department Working Papers 284, OECD Publishing.
    7. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
    8. Kemnitz, Alexander, 2001. "Endogenous growth and the gains from immigration," Economics Letters, Elsevier, vol. 72(2), pages 215-218, August.
    9. Hillman, Arye L. & Weiss, Avi, 1999. "A theory of permissible illegal immigration," European Journal of Political Economy, Elsevier, vol. 15(4), pages 585-604, November.
    10. Gaytan-Fregoso, Helena & Lahiri, Sajal, 2000. "Foreign aid and illegal immigration," Journal of Development Economics, Elsevier, vol. 63(2), pages 515-527, December.
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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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