Employer sanctions, and the welfare of native workers

Oded Stark and Marcin Jakubek

No 38, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics

Abstract: We investigate the impact of the imposition of sanctions for employing illegal migrants on the welfare of native workers. Our analysis is based on the premise that in response to such sanctions, managers in a firm may be reassigned from supervision of production to verification of the legality of the firm's workforce. When there is full employment in the host country, a profit-maximizing firm will assign managers to verification if the sanctions are steep enough. This reassignment impedes production efficiency and, consequently, leads to a reduction in the wages of both illegal migrants and native workers, inevitably hurting the latter, who are the intended beneficiaries of the sanctions.

Keywords: Employer sanctions; Illegal migrant workers; Natives' welfare; The formation of public policy (search for similar items in EconPapers)
JEL-codes: D21 I38 J21 J61 K31 L51 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-hrm and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuewef:38

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