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Illegal Immigration in a Heterogeneous Society

Theodore Palivos and Chong Yip

Discussion Paper Series from Department of Economics, University of Macedonia

Abstract: This paper examines the effects of illegal immigration in a neoclassical growth model with two groups of workers, skilled and unskilled. We show that although illegal immigration is a boon to a country as a whole, there are distributional effects, whose sign is in general ambiguous. This is because all sources of income of both groups are affected and some of these changes tend to move income in opposite directions. Nevertheless, a calibration exercise shows that the wealth distribution is likely to become more unequal as the number of illegal immigrants increases. We confirm most of our calibration results analytically in a small open economy version of the basic model.

Keywords: Economic Growth; Illegal Immigration; Income Distribution (search for similar items in EconPapers)
JEL-codes: F22 O41 (search for similar items in EconPapers)
Date: 2007-12, Revised 2007-12
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http://aphrodite.uom.gr/econwp/pdf/immigration2.pdf

Related works:
Working Paper: Illegal Immigration in a Heterogeneous Society (2007)
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