Illegal Immigration and the Shadow Economy
Published By: SSRN | Published Date: December, 01 , 2015We build a general equilibrium model in which both illegal immigration and the size of the informal sector are endogenously determined. In this framework, we show that indirect policy measures such as tax reduction and detection of informal activities can be used as substitutes for border enforcement, in order to contrast illegal immigration. We also find that a welfare-maximising Government that includes illegal immigration in its objective function, instead of focusing on the well-being of native workers only, will set the tax rate to a lower value.
Author(s): Carmen Camacho, Fabio Mariani, Luca Pensieroso | Posted on: Dec 29, 2015 | Views()