Illegal Immigration and the Shadow Economy

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 9545

Classification and Topics

• Classification: Wirtschaft ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements ; International Migration ; Geographic Labor Mobility; Immigrant Workers
• Subject: illegal immigration ; informal sector ; shadow economy ; taxation ; immigration policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Camacho, Carmen ; Mariani, Fabio ; Pensieroso, Luca
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/126641
• Last update: 10.03.2025, 11:42 AM CET