Illegal aliens,unemployment and immigration policy

"This paper develops a simple two-country model of illegal immigration in an attempt to examine the interaction among variables such as the stock of migrant labor, the unemployment rates of the two economies, and the rate of spending by the host country on the enforcement of its immigration restrictions. The focus of the analysis is on the dynamics of immigration policy and on its role in determining the nature of the mechanism by which disturbances to the labor market of one country are transmitted to that of the other in the short run and in the long run."     

Illegal immigration: a supply side analysis

"This paper analyzes the supply-side determinants of illegal immigration using a three-sector general equilibrium model of the source country. Agricultural liberalization raises illegal immigration while liberalization of the high tech sector reduces it. In contrast, capital mobility in the source country renders trade policy ineffective for controlling illegal immigration. Paradoxically, increased enforcement (by the host country) may raise source country unskilled wages, although illegal immigration falls. Finally, under capital mobility, a rise in the source country restrictions on capital inflow raises the level of illegal immigration and reduces the effectiveness of border enforcement efforts by the host country."     

Illegal immigration in a heterogeneous labor market

This paper examines the effects of illegal immigration in a neoclassical growth model with two groups of workers, skilled and unskilled. We show that although illegal immigration is a boon to a country as a whole, there are distributional effects, whose sign is in general ambiguous. This is because all sources of income of both groups are affected and some of these changes tend to move income in opposite directions. Nevertheless, calibration exercises show that the wealth distribution is likely to become more unequal as the number of illegal immigrants increases. We confirm most of our calibration results analytically in a small open economy version of the basic model. Finally, our results remain robust when we extend the model to allow for endogenous skill acquisition.     

Illegal immigration in the presence of labor unions

"This paper develops a general equilibrium framework of a two-sector economy which incorporates illegal immigration in the presence of labor unions. It demonstrates that stricter enforcement of immigration laws, by reducing the demand for or supply of illegal aliens, benefits all legal workers in the economy. The model is used to evaluate the impact of these policy changes on national income. Results indicate that national income does not necessarily fall when immigration controls are tightened. The existence of a union mitigates the negative welfare impact of a reduction in the number of illegal immigrants."     

Crime and benefit sanctions

In this paper we look at the relationship between crime and economic incentives in a different way to other work in the economics of crime field. We look at empirical models where a toughening of the unemployment benefit regime can be used to study how people on the margins of crime may react to changes in economic incentives. We present three sets of complementary evidence, all of which show that toughening the benefit regime can have an unintended consequence, namely increases in crime. The first approach presents quasi-experimental evidence, looking at crime rates in areas of England and Wales before and after the introduction of a new, tougher unemployment benefit programme—the Jobseekers Allowance (JSA)—in October 1996. The second approach considers qualitative evidence on individuals affected by the change in the benefit regime. The third relates changes in area crime rates to post-JSA sanctions. Each of these approaches uncovers evidence of higher crime occurring as a consequence of the benefit reform.

Risk preference,immigration policy and illegal immigration

The paper analyzes the effects of government policy upon illegal immigration. The model used as a vehicle for this analysis is an extension of Ethier's one-small-country model of illegal immigration to a two-country context. We distinguish between the cases of capital immobility and free capital mobility, and consider illegal immigration when there are border patrols by the government and when there are internal enforcement procedures in effect. Unlike previous researchers who have assumed risk neutrality, we examine the impacts of government policy when prospective illegal immigrants exhibit risk averse and risk loving behavior. The relaxation of the risk neutrality assumption leads to the possibility of multiple and unstable equilibria. Moreover, attitudes to risk and the probability of detection are shown to have implications for some equilibrium responses to tighter surveillance.     

Risk preference,immigration policy and illegal immigration

The paper analyzes the effects of government policy upon illegal immigration. The model used as a vehicle for this analysis is an extension of Ethier's one-small-country model of illegal immigration to a two-country context. We distinguish between the cases of capital immobility and free capital mobility, and consider illegal immigration when there are border patrols by the government and when there are internal enforcement procedures in effect. Unlike previous researchers who have assumed risk neutrality, we examine the impacts of government policy when prospective illegal immigrants exhibit risk averse and risk loving behavior. The relaxation of the risk neutrality assumption leads to the possibility of multiple and unstable equilibria. Moreover, attitudes to risk and the probability of detection are shown to have implications for some equilibrium responses to tighter surveillance.     

Job market signaling and employer learning

We consider a signaling model where the sender?s continuation value after signaling depends on his type, for instance because the receiver is able to update his posterior belief. As a leading example, we introduce Bayesian learning in a variety of environments ranging from simple two-period to continuous-time models with stochastic production. Signaling equilibria present two major departures from those obtained in models without learning. First, new mixed-strategy equilibria involving multiple pooling are possible. Second, pooling equilibria can survive the Intuitive Criterion when learning is efficient enough.     

Electoral systems and immigration

Unexplored stylized facts on OECD countries suggest that plurality electoral systems are associated with higher openness to immigration. We propose an explanation based on a retrospective voting model where immigration hurts voters but benefits a rent-seeking policymaker who appropriates part of the income generated by immigrants. To be reappointed, the policymaker must distribute the compensation. With respect to proportional systems, plurality systems make it possible to compensate only a few decisive districts and leave after-compensation rents higher, therefore producing higher immigration. In our model, non-decisive districts receive no compensation at all under both electoral systems, providing a rationale for widespread anti-immigration attitudes. Notably, our results also help to explain why governments often seem more pro-immigration than do voters. Finally, our model predicts that opposition to immigration is more geographically dispersed in plurality systems. Basic evidence supports this prediction.     

Local employer competition and training of workers

The new training literature suggests that in a monopsonistic market employers will not only pay for firm-specific training but also pay for general training if the risk of poaching is limited. This implies that training should decrease with more competition for employees among firms. Using worker-level data for Germany on training participation and on training duration, the authors find empirical support for this hypothesis. Specifically, the authors find that employees are significantly less likely to participate in training if the local density of firms in a sector is high and they have shorter training durations when the local sector concentration is low.     

Income,taxes and employer pension contributions

This paper empirically examines the effects of a change in foreign trade regime on productivity growth. Based on a Generalized Leontief factor demand function system, total factor productivity growth (TFPG) rates are calculated for the Turkish rubber industry during a substantial trade liberalization in the 1980s: TFPG was significantly higher following trade liberalization. Technological change was the major contributor to this growth. When a panel data estimation technique is used to explain technological change, the effects of trade liberalization become clearer: a one percentage point increase in the protection level led to more than a one percentage point (1.27) decline in the technological change rate.     

Group rewards and individual sanctions in environmental policy

We examine an incentive scheme for a group of agents, where all agents are rewarded if the group meets its target. If the group does not meet its target, only the agents that meet their individual target are rewarded. This incentive scheme is applied in the UK Climate Change Agreements. There is only a difference in outcome between group and individual rewards if performance is stochastic. Group rewards lead to lower abatement than individual rewards if targets are realistic, i.e. if they have a high probability of being reached. Given the strictness of the targets, the agents prefer group rewards. The principal might want to use group rewards because they require less information, out of fairness concerns, or to combine strict targets with weak enforcement.     

Country impacts of multilateral oil sanctions

In recent years, economic sanctions have become an important tool in the conduct of U.S. foreign policy. Though usually aimed at a single country, they also can affect the economies of other nations. Knowledge of such impacts would inform U.S. policy-makers as to which other countries might be helped or harmed, and help predict which other nations likely would support or oppose the sanctions. This article presents results relating to the imposition of sanctions in the oil market. These results are obtained from exercising a dynamic computable general equilibrium model built by Charles River Associates under sponsorship of the American Petroleum Institute. The model is used to analyze GDP effects on a number of countries from multilateral oil sanctions against Iraq. The results suggest that it is possible to provide useful information regarding the impacts of sanctions as a foreign policy tool. However, they also indicate that sanctions can be expensive, with substantial spillover effects. Though sanctions may be an appropriate policy choice in given instances, these effects should be incorporated into foreign policy analyses.     

Experiments on unemployment benefit sanctions and job search behavior

This paper presents the results of an experimental study on unemployment benefit sanctions. The experimental set-up allows us to distinguish between the effect of benefit sanctions once they are imposed (the ex post effect) and the threat of getting a benefit sanction imposed (the ex ante effect). We find that both effects matter. Moreover, the ex ante effect turns out to be substantial and bigger than the ex post effect. Benefits sanctions stimulate the outflow from unemployment.     

Approaches to learn about employer learning

The empirical literature on employer learning assumes that employers learn about unobserved ability differences across workers as they spend time in the labour market. This article describes testable implications that arise from this basic hypothesis and how they have been used to quantify the contribution of job market signalling and human capital in measured returns to education. While the empirical basis is still thin, the results suggest that signalling contributes at most about 25% to the observed returns to education.     

America's post-war immigration policy

This article provides a historical perspective on immigration policy in the US after World War II and assesses the present situation. US immigration and refugee policy has undergone significant change since World War II. The McCarran-Walter Act of 1952, which instituted a system of proportional quotas based on national origins, was discarded in 1965 following years of criticism that it discriminated against nonwhites. Third World immigrants, especially from Asia and the Americas, have benefited from the immigration laws. However, the problems resulting from unrestricted and undifferentiated immigration are now becoming apparent, even to liberal critics of previous national origins policies. During the 1970s, there was a 61% increase in the number of Mexican nationals in the US and Mexicans currently comprise over 20% of the population in 40 Congressional districts in 8 states. 83.3% of legal immigrants, and all illegal immigrants, are of non-European descent--a fact that may retard their assimilation and intensify ethnic tensions. There is a danger that the concept of national borders may become superfluous. The theoreticval liberalism of the 1950s and 1960s is, in the 1970s, being confronted with the reality of large numbers of immigrants unable and unwilling to be absorbed into a previously European-dominated country. It is concluded that the enforced application of the concept of equality in matters of immigration has not been the panacea that its liberal proponents envisioned.     

Constitutional choice and European immigration policy

The EU’s immigration policy is evaluated from the standpoint of constitutional economics. The main conclusion is that European immigration policy is trapped in a system of constitutional regulations that is too rigid as it is exclusively oriented towards the protection and securitisation of European borders. As such, it is not capable of allowing the development of a problem-solving capacity based on successive trials, and this produces negative outcomes for the whole of the EU.