The Labor Market Effects of Reducing the Number of Illegal Immigrants

Andri Chassambouli and Giovanni Peri
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Andri Chassambouli: University of Cyprus
Authors registered in the RePEc Author Service: Andri Chassamboulli

Review of Economic Dynamics, 2015, vol. 18, issue 4, 792-821

Abstract: A controversial issue in the US is how to reduce the number of illegal immigrants and what effect this would have on the US economy. To answer this question we set up a two-country model with search in labor markets and featuring legal and illegal immigrants among the low skilled. We calibrate it to the US and Mexican economies during the period 2000-2010. As immigrants, especially illegal ones, have a worse outside option than natives their wages are lower. Hence their presence reduces the labor cost of employers who, as a consequence, create more jobs per unemployed when there are more immigrants. Because of such effect our model shows that increasing deportation rates and tightening border control weakens the low-skilled labor markets, increasing unemployment of native low skilled. Legalization, instead decreases the unemployment rate of low-skilled natives and it increases income per native. (Copyright: Elsevier)

Keywords: Illegal immigrants; Job creation; Unemployment; Wages (search for similar items in EconPapers)
JEL-codes: F22 J61 J64 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (77)

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Working Paper: The labor market effects of reducing the number of illegal immigrants (2015)
Working Paper: The Labor Market Effects of Reducing the Number of Illegal Immigrants (2014)
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DOI: 10.1016/j.red.2015.07.005

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