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Illegal immigration and the shadow economy

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Camacho Pérez, Maria del Carmen [UCL] Mariani, Fabio [UCL] Pensieroso, Luca [UCL]

We build a 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 counteract illegal immigration. We also find that a welfare-maximizing government will set the tax rate to a lower value, if it includes illegal immigration in its objective function, instead of focusing on the well-being of native workers only.

Document type Article de périodique (Journal article) – Article de recherche
Access type Accès restreint
Publication date 2017
Language Anglais
Journal information "International Tax and Public Finance" - Vol. 24, no.6, p. 1050-1080 (December 2017)
Peer reviewed yes
Publisher Springer New York LLC ((United States) New York)
issn 0927-5940
e-issn 1573-6970
Publication status Publié
Affiliation UCL - SSH/LIDAM/IRES - Institut de recherches économiques et sociales
Keywords Illegal immigration ; Informal sector ; Shadow economy ; Taxation ; Immigration policy
Links
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Bibliographic reference Camacho Pérez, Maria del Carmen ; Mariani, Fabio ; Pensieroso, Luca. Illegal immigration and the shadow economy. In: International Tax and Public Finance, Vol. 24, no.6, p. 1050-1080 (December 2017)
Permanent URL http://hdl.handle.net/2078.1/189172