Illegal immigration and the shadow economy

Carmen Camacho, Fabio Mariani () and Luca Pensieroso

International Tax and Public Finance, 2017, vol. 24, issue 6, No 5, 1050-1080

Abstract: Abstract We build a 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 counteract illegal immigration. We also find that a welfare-maximizing government will set the tax rate to a lower value, if it includes illegal immigration in its objective function, instead of focusing on the well-being of native workers only.

Keywords: Illegal immigration; Informal sector; Shadow economy; Taxation; Immigration policy (search for similar items in EconPapers)
JEL-codes: F22 J61 O17 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Illegal immigration and the shadow economy (2017)
Working Paper: Illegal immigration and the shadow economy (2017)
Working Paper: Illegal Immigration and the Shadow Economy (2015)
Working Paper: Illegal Immigration and the Shadow Economy (2015)
Working Paper: Illegal Immigration and the Shadow Economy (2015)
Working Paper: Illegal Immigration and the Shadow Economy (2015)
Working Paper: Illegal Immigration and the Shadow Economy (2015)
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DOI: 10.1007/s10797-017-9444-5

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