Illegal immigration and the shadow economy

Carmen Camacho (), Fabio Mariani () and Luca Pensieroso
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Carmen Camacho: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Fabio Mariani: UCL IRES - Institut de recherches économiques et sociales - UCL - Université Catholique de Louvain = Catholic University of Louvain, IZA - Institute for the Study of Labor - Institute for the Study of Labor (IZA) Bonn

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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; Clandestine workers; Informal sector; Shadow economy; Black market; Taxation; Immigration policy (search for similar items in EconPapers)
Date: 2017-12
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03968483v1
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Citations: View citations in EconPapers (3)

Published in International Tax and Public Finance, 2017, 24 (6), pp.1050-1080. ⟨10.1007/s10797-017-9444-5⟩

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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 (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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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-03968483

DOI: 10.1007/s10797-017-9444-5

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