Dealing with Illegal Immigration: the Role of Informality, Taxation and Trade

Carmen Camacho, Fabio Mariani () and Luca Pensieroso

No 2018007, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We develop a two-good, three-sector model of a small open economy with illegal immigration and both formal and informal production. In this framework, we explore the consequences of fiscal policy and trade openness for illegal immigration and the shadow economy. We find that (i) the effect of trade openness on illegal immigration crucially depends on the degree of substitutability between native and illegal labor in the informal sector, (ii) the reach of fiscal policy goes beyond its traditional domain: fiscal instruments can be effectively used as immigration policy tools.

Keywords: Illegal immigration; Informal sector; Shadow economy; Taxation; Immigration policy; Globalisation; Open economy (search for similar items in EconPapers)
JEL-codes: F22 J61 O17 (search for similar items in EconPapers)
Pages: 25
Date: 2018-05-20
New Economics Papers: this item is included in nep-int, nep-iue and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2018007

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