Illegal Immigration and the Shadow Economy

Carmen Camacho (), Fabio Mariani () and Luca Pensieroso
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Carmen Camacho: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: We build a general equilibrium model in which both illegal immigration and the size of the informal sector are endogenously determined and interact in a non-trivial way. We show that policy measures such as tax reduction and detection of informal activities can be used as substitutes for border enforcement, in order to contrast illegal immigration. In our framework, a welfare-maximising Government will never choose to drive illegal immigration to zero, but will set the tax rate to a lower value if it includes illegal immigration in its objective function.

Keywords: Illegal immigration; Clandestine workers; Informal sector; Shadow economy; Black market; Taxation; Immigration policy (search for similar items in EconPapers)
Date: 2015-06
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01178945
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Citations: View citations in EconPapers (5)

Published in 2015

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Related works:
Journal Article: Illegal immigration and the shadow economy (2017)
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)
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