Self-Interested Governments, Unionization, and Legal and Illegal Immigration

Tapio Palokangas

Czech Economic Review, 2008, vol. 2, issue 1, 007-020

Abstract: This paper examines an economy with following properties. Attempts to restrain illegal immigration incur costs. Illegal workers can work only in the competitive sector. Workers and employers bargain over wages in the unionized sector and lobby the government for immigration policy and workers’ bargaining power. The main findings are as follows. If the government can determine legal immigration, then it expropriates rents from labor unions. In that case, neither workers nor employers are worse off, if legal immigration is increased by an international agreement. High per worker public spending involves border enforcement and the protection of union power.

Keywords: immigration; lobbying; labor unions; menu auction (search for similar items in EconPapers)
JEL-codes: D72 D73 J51 J61 (search for similar items in EconPapers)
Date: 2008
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