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- Title
The Role of Risk Preference in Immigration and Minimum Wage Policies.
- Authors
Yulian Wang; Hongfei Zhu
- Abstract
This paper examines the effects of two enforcement policies and a minimum wage policy in controlling illegal immigration and improving welfare when capital is immobile. The model highlights the importance of the role of risk preference by considering various attitudes to risk held by illegal immigrants and host firms. It is shown that the effect of internal enforcement on the wage rate in host firms depends on the attitude to risk of illegal immigrants and host firms. It is also shown that the impacts of the minimum wage legislation differ according to risk preference and the degree of labor employment elasticity to the source wage. Moreover, attitude to risk is shown to be important in determining the effectiveness of policies on welfare.
- Subjects
IMMIGRATION policy; MINIMUM wage -- Government policy; UNDOCUMENTED immigrants; IMMIGRANTS; LABOR laws; ATTITUDE (Psychology)
- Publication
B.E. Journal of Economic Analysis & Policy, 2014, Vol 14, Issue 4, p1709
- ISSN
2194-6108
- Publication type
Article
- DOI
10.1515/bejeap-2013-0039