Illegal Immigration, Factor Substitution and Economic Growth
Jianpo Xue and
Discussion Paper Series from Department of Economics, University of Macedonia
This paper develops a growth model with illegal immigration in which there exist two types of domestic labor, skilled and unskilled. These two types enter the production via a CES aggregator. In a similar manner, the paper also allows for the possibility of imperfect substitution between native and immigrant labor. Within such a framework it analyzes the e ects of an increase in immigration on the average capital stock, individual wages, asset holdings and the distribution of wealth. Contrary to previous results in the literature, the paper shows that illegal immigration may not necessarily make the distribution of wealth more unequal and unskilled labor worse o . This is so because the end results depend on the elasticities of substitution between di erent types of labor. Thus, assuming erroneously that immigrants and natives are perfect substitutes could lead to results that are not only over-estimated but also of the wrong sign.
Keywords: Illegal Immigration; Economic Growth; Income Distribution; Factor Sub- stitution. (search for similar items in EconPapers)
JEL-codes: O41 F22 E25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-fdg and nep-mig
Date: 2011-06, Revised 2011-06
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:mcd:mcddps:2011_10
Access Statistics for this paper
More papers in Discussion Paper Series from Department of Economics, University of Macedonia
Series data maintained by Theodore Panagiotidis ().