Dealing with Illegal Immigration: the Role of Informality, Taxation and Trade
Carmen Camacho (),
Fabio Mariani () and
Luca Pensieroso ()
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Carmen Camacho: PARIS SCHOOL OF ECONOMICS and CNRS
No 2018007, Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)
We develop a two-good, three-sector model of a small open economy with illegal immigration and both formal and informal production. In this framework, we explore the consequences of fiscal policy and trade openness for illegal immigration and the shadow economy. We find that (i) the effect of trade openness on illegal immigration crucially depends on the degree of substitutability between native and illegal labor in the informal sector, (ii) the reach of fiscal policy goes beyond its traditional domain: fiscal instruments can be effectively used as immigration policy tools.
Keywords: Illegal immigration; Informal sector; Shadow economy; Taxation; Immigration policy; Globalisation; Open economy (search for similar items in EconPapers)
JEL-codes: O17 F22 J61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int, nep-iue and nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2018007
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