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Illegal Immigration and the Shadow Economy

Carmen Camacho (), Fabio Mariani () and Luca Pensieroso ()

No 9545, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We build a general equilibrium 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 contrast illegal immigration. We also find that a welfare-maximising Government that includes illegal immigration in its objective function, instead of focusing on the well-being of native workers only, will set the tax rate to a lower value.

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)
Pages: 33 pages
Date: 2015-12
New Economics Papers: this item is included in nep-iue and nep-mig
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Citations: View citations in EconPapers (1) Track citations by RSS feed

Published in: International Tax and Public Finance, 2017, 24, 1050-1080

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Related works:
Journal Article: Illegal immigration and the shadow economy (2017) Downloads
Working Paper: Illegal Immigration and the Shadow Economy (2015) Downloads
Working Paper: Illegal Immigration and the Shadow Economy (2015) Downloads
Working Paper: Illegal Immigration and the Shadow Economy (2015) Downloads
Working Paper: Illegal Immigration and the Shadow Economy (2015) Downloads
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