RESTRICTING EMPLOYMENT OF LOW-PAID IMMIGRANTS: A GENERAL EQUILIBRIUM ASSESSMENT OF THE SOCIAL WELFARE IMPLICATIONS FOR LEGAL U.S. WAGE-EARNERS

Peter Dixon, Maureen Rimmer and Bryan W. Roberts

Contemporary Economic Policy, 2014, vol. 32, issue 3, 639-652

Abstract: type="main" xml:lang="en">

This paper builds on earlier work that used a general-equilibrium model to show that reducing employment of unauthorized immigrants in the United States through a tighter border-security policy lowers the average income of legal residents. Here we exploit further the detail available in the general-equilibrium model to look at distributional effects, recognizing that the policy increases wage rates for low-paid legal workers. We assess the social welfare effect on legal workers using a constant elasticity of substitution social welfare function. We contrast our general-equilibrium approach to immigration analysis with the more commonly used partial-equilibrium, econometric approach. (JEL D63, J61, C68)

Date: 2014
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