The Proposed Immigration Reform in the United States: Its Impact on the Employment of Illegal Aliens by the Firm

Eliakim Katz and Oded Stark

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: In view of proposed immigration reform pertaining to the employment of illegal aliens we model a competitive, risk-averse firm employing legal as well as illegal workers whose wage is effectively a random variable. Inter alia we find that this wage does not affect the scale of the firm's operations; that parametric changes in the wage function of illegal workers have the expected effect on their employment yet do not affect the firm's output level; that a higher output price will result in proportionately more illegal hiring than legal hiring; and that a higher wage for legal workers may result in more of them being employed.

Date: 1985
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