Illegal Immigration and Second-best Import Tariffs

A version of the small‐union Meade model is presented to analyze the illegal immigration problem in the context of import tariffs. Two possible host nation objectives are considered: (i) to control the level of illegal immigration to a given target; or (ii) to choose an illegal immigration level that maximizes national welfare. Available policy instruments are import tariffs/subsidies, border, and internal enforcement levels. The second‐best tariff on imports from the source nation (for illegal immigration) can be of either sign. It depends on the effect of the tariff on the wage rate and the pattern of substitutability in consumption. In scenario (ii), greater enforcement may be justified if it reduces labor inflow and thereby contracts the protected sector. If enforcement is too costly, tariff policy may substitute for it to exploit monopsony power in the labor market and to counter the distortionary effects of labor flows.     

Immigration as industrial strategy in American meatpacking

Abstract

This paper examines the connections linking recent changes in Latino migration, the American meatpacking industry, and American immigration policy. As the meatpacking industry has vertically integrated and shifted to rural non-union areas throughout the South, it has grown increasingly dependent on short-term low-skilled employees. This process can be understood as the industrialization of meatpacking, where profitability depends on continuous high-throughput production. To succeed, the industrialization of meatpacking requires a large pool of easily replaceable labor that has no control over the pace work on of the shop floor. At the same time, as immigrants have been drawn to these new company towns, American immigration policy has turned increasingly towards border enforcement. We argue that the presence of illegal immigrants within the factories reduces the bargaining power of shop workers and increases employer control. Most studies of immigration have focused on the supply of migrant labor, the immigrants attracted to higher paying jobs. We argue that valuable insight is gained by looking at the manufacturers' demand for cheap labor and the implementation of an industrial strategy that requires it.     

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 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."     

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.     

Political economy, sectoral shocks, and border enforcement

In this paper, we examine the correlation between sectoral shocks and border enforcement in the United States, the U.S. government's main policy instrument for combating illegal immigration. We see whether border enforcement falls following positive shocks to sectors that are intensive in the use of undocumented labour, as would be consistent with political economy models of illegal immigration. We find that border enforcement is negatively correlated with lagged relative price changes in the apparel, fruits and vegetables, and livestock industries and with housing starts in western United States, suggesting that authorities relax border enforcement when demand forundocumented labour is high.
Economie politique, chocs sectoriels et vigilance aux frontières. Dans ce mémoire, les auteurs examinent la corrélation entre les chocs sectoriels et la vigilance aux frontières aux Etats-Unis. La vigilance aux frontières est le principal instrument de politique publique utilisé par le gouvernement américain pour combattre l'immigration illégale. On se demande si la vigilance aux frontières se relâche à la suite de chocs positifs dans des secteurs qui utilisent relativement plus de travailleurs illégaux, ainsi que le suggèrent les modèles d'économie politique de l'immigration illégale. Les principaux résultats indiquent que la vigilance aux frontières est co-reliée négativement (avec un délai) avec les changements de prix relatifs dans les secteurs du vêtement, des fruits et légumes, et du bétail, ainsi qu'avec le nombre de mises en chantier dans la construction domiciliaire dans l'ouest des Etats-Unis. Voilà qui suggère que les autorités relâchent la vigilance aux frontières quand la demande de travailleurs illégaux augmente.     

Government policy under price uncertainty: A source of volatility in illegal immigration

This paper provides an alternative explanation for why illegal immigration can exhibit substantial volatility. We develop a model economy where migrants make decisions in the face of uncertain border enforcement and transfers from the host country. The uncertainty is extrinsic, a sunspot, and arises due to ambiguity regarding government policy; the sunspot manifests itself as uncertainty in the commodity price of money. Immigration volatility stems from both the trade‐off between the marginal benefits and costs (transfers and enforcement) to migrating and the existence of a sunspot. Finally, we examine the impact of changes in government policies on migration levels.     

U.S. IMMIGRATION REFORM: POLICY ISSUES AND ECONOMIC ANALYSIS

In recent years, legal U. S. immigration has approached historically high levels, and illegal immigration has been thought to be high and perhaps rising. Consequently, the Select Commission on Immigration and Refugee Policy proposed sweeping changes in the nation's immigration laws. During 1984, both the Senate and House passed the Immigration Reform and Control Act (Simpson-Mazzoli Bill). This bill subsequently died in the conference committee that was established to reconcile differences between the bill's two versions. The proposed act has three major provisions: (1) control of illegal immigration, (2) legalization of alienstatus, and (3) reform of legal immigration. Both the House and Senate versions would maintain the present orientation of U.S. immigration policy toward family reunification, but the Senate proposed significant changes in legal immigration restrictions that would shift policy slightly more toward labor considerations. These proposed changes were eliminated in the compromise made in the conference committee. Employer sanctions and legalization of illegal aliens were left as the two most prominent alterations to existing policy. During 1985, the 99th Congress is likely to reconsider the Simpson-Mazzoli Bill, perhaps in a streamlined version which emphasizes employer sanctions, legalization, and a substantial increase in border enforcement.     

Congestion and Optimal Immigration Policy

This paper presents a model to explain the stylized fact that many countries have a low ratio of migrants in their population while some countries have a high ratio of migrants. Immigration improves the income of the domestic residents, but migrants also increase the congestion of public services. If migrants are unskilled and therefore pay low taxes, and the government does not limit access to these services, then the welfare of the domestic residents decreases with the number of migrants. Visa auctions can lower the cost of immigration control and substitute legal migrants for illegal migrants. If the government decides to limit the access of migrants to public services, immigration control becomes unnecessary and the optimal number of migrants can be very large.     

A theory of permissible illegal immigration

In many countries laws are not enforced against visibly present illegal immigrants. The visibly present illegal immigrants also tend to be concentrated in particular sectors. We explain such permissible illegal immigration in an endogenous-policy model where selective sector-specific illegality transforms illegal immigrants from non-sectorally specialized to sector-specific factors of production. Under initial conditions where no immigrants are present, the median voter opposes immigration. When, however, a population of illegal immigrants has accumulated, ongoing illegal immigration becomes an endogenous equilibrium policy, at the same time that a majority of voters opposes legal immigration and opposes amnesty that would legalize the immigrants' presence. We also establish a basis for domestic voters preferring that illegal immigrants be employed in service rather than traded-goods sectors.     

Controlling Illegal Immigration: On the Scope for Cooperation with a Transit Country

We consider the implications of cooperation with respect to immigration control between a final‐destination country (D) and its poorer neighbor (T). Assuming that the latter serves as a transit country for undocumented immigrants, a key question is how much aid should D provide to T for the purpose of strengthening its immigration controls. The problem for T is to determine what proportion of aid to use strictly for immigration control rather than trying to meet other border‐security objectives. We examine the Nash equilibrium values of the policy instruments of both countries and compare them with those which are optimal when international cooperation on immigration control extends to maximization of joint welfare. We also consider a two‐stage game in which D first decides on how much aid to transfer to T, with the latter subsequently choosing how to use it.     

Effects of enforcement on illegal markets: Evidence from migrant smuggling along the southwestern border

The paper analyzes the effects of tighter border control on the illegal crossing market between Mexico and the United States. Combining panel data on illegal migrants with enforcement statistics, the effects of enforcement are found to be moderate: prices of border smugglers (‘coyotes’) increased by only 17%, while the demand for smugglers has remained unchanged. Enforcement has however shifted illegal migrants to remote crossing places. Border crossing is now more time-intensive with higher prices for coyotes and risk of death. This geographic substitution raised migration costs by $140, more than twice the effect of enforcement on smuggling prices.     

Welfare and sectoral productivity shifts in a small open economy with imported agricultural inputs: The case of Sub-Saharan Africa

This paper studies the impact of sectoral productivity growth on welfare in Sub-Saharan Africa. Using the analytical framework of a DSGE model, the main finding is that, for the estimated values of structural parameters, the allocation of scarce resources to the tradable agricultural sector for boosting productivity leads to a greater increase in overall welfare than would be the case if they were allocated to the non-traded goods sector.

     

Carbon Abatement and International Spillovers

Carbon abatement policies in large open economies affect both the allocation of domestic resources and international market prices. A change in international prices implies an indirect secondary burden or benefit for all trading countries. Based on simulations with a large-scale computable general equilibrium model of global trade and energy use, we show that international spillovers have important welfare implications for carbon abatement policies designed to meet exogenous emission reduction targets. We present a decomposition of the total welfare effect of carbon abatement policies into a primary domestic market effect (at constant international prices) and a secondary international spillover impact as a result of changes in international prices. This decomposition reveals the extent to which domestic abatement costs are increased or decreased as a result of the impact of carbon abatement on international prices.     

International immigration and economic welfare in an efficiency wage model: The co-existence case of both legal and illegal foreign workers

Abstract. In the developed countries some native workers are unemployed while there exist illegal unskilled (legal skilled) foreign workers who are complementary to (substitutable for) natives and their wages are usually lower than (equal to) that of natives. Reflecting this situation, we introduce two types of immigrant in an efficiency wage model. It is shown that domestic government should exclude illegal foreign workers but welcome legal ones if the total number of illegal immigrants is small enough and well controlled. On the other hand, legal immigration should be restricted if the flood of illegal immigration is out of control.     

Quota Enforcement in Resource Industries: Self-Reporting and Differentiated Inspections

Quotas are frequently used in the management of renewable resources and emissions. However, in many industries there is concern about their basic effectiveness due to non-compliance. We develop an enforcement model of a quota-regulated resource and focus on a situation with significant non-compliance and exogenous constraints on fines and enforcement budget. We propose a new enforcement system based on self-reporting of excess extraction and explicit differentiation of inspection rates depending on compliance history. We use differentiated inspections to induce firms to self-report excess extraction. This system increases the effectiveness of the quota by allowing the regulator to implement a wider range of aggregate extraction targets than under traditional enforcement, while ensuring an efficient allocation of extraction. In addition, inspection costs can be reduced without reductions in welfare.     

Fear,Loathing and the Everyday Geopolitics of Encounter in the Arizona Borderlands

This paper argues for the importance of attending to both affective and emotional experience in analysing the origins and effects of border and immigration efforts in the US/Mexico border region. We do so by engaging with theoretical understands of the politics of affect and emotion among cultural and feminist geographers and social scientists. We then examine Arizona's SB 1070 and its connection to a larger history of border and immigration enforcement in Arizona. Drawing from ethnographic work, interviews, and media and policy analysis, we engage with narratives provided by border area ranchers to unpack how these ranchers' encounters with unauthorised migrants have changed over time. We then examine how the everyday fear and anxiety associated with these encounters drive political activism and state intervention in the region. We conclude by discussing how this intervention, in turn, reproduces racial and gender hierarchies, hierarchies that are themselves affectively mediated.     

Exports to Smuggle and Smuggling Technologies*

Our analysis is motivated by cases of cigarette smuggling in Canada and in the UK. In the 1990s, domestic cigarettes were legally exported to be subsequently illegally imported. At first, smuggling was done by individual consumers who bought cigarettes abroad and brought them back through policed points of entry. This Mom and Pop smuggling was a mechanism to implement a second‐degree price discrimination scheme by cigarette manufacturers. Regrets from committing tax evasion and labels on exported cigarettes packs permit vertical differentiation of illegal and legal cigarettes. Paradoxically, labeling measures can make illegal sales more resilient to tax reductions, and stricter border enforcement encourages a switch to a less benign smuggling technology exclusive to criminal organizations. High export taxes terminated export‐to‐smuggle schemes, but brought about a surge of counterfeit cigarettes. Because of a second‐degree price discrimination scheme, the elimination of taxes need not suffice to eradicate smuggling.     

Welfare effects of competitive lobbying efforts in international oligopoly markets

Conventionally, rent-seeking activities have been considered to deteriorate social welfare and to distort resource allocation. This paper examines whether rent-seeking behavior can improve social welfare by focusing on the welfare effects of firms’ competitive lobbying efforts when governments can impose market entry regulation against foreign firms. We demonstrate that competitive lobbying efforts can improve social welfare when such lobbying efforts are directed to reduce market entry barriers. In addition, social welfare can be maximized when the government shows the maximum sensitivity to the foreign firm's political contributions while maintaining competitive market structure. Moreover, it is shown that the dominant strategy for a domestic firm is to allocate more resources to R&D sectors while it is optimal for foreign firms is to exert more efforts in lobbying to reduce the market entry barriers when a government makes political economic approach in market entry regulations.