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On the Macroeconomic and Welfare Effects of Illegal Immigration

Xiangbo Liu

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the macroeconomic and welfare effects of illegal immigration on the native born within a dynamic general equilibrium framework with labor market frictions. A key feature of the model is that job competition is allowed for between domestic workers and illegal immigrants. We calibrate the model to match some key statistics of the postwar U.S. economy. The model predicts that in the long run illegal immigration is a boon, but the employment opportunities of domestic workers are strongly negatively affected. The model also predicts that the level of domestic consumption has a U-shaped relationship with the share of illegal immigrants.

Keywords: Economic Growth; Immigration; Welfare; Search; Unemployment (search for similar items in EconPapers)
JEL-codes: F22 J64 O41 (search for similar items in EconPapers)
Date: 2009-05-28
New Economics Papers: this item is included in nep-dge, nep-lab, nep-mac and nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:15469

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