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- Title
Illegal immigration and the shadow economy.
- Authors
Camacho, Carmen; Mariani, Fabio; Pensieroso, Luca
- Abstract
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.
- Subjects
UNDOCUMENTED immigrants; INFORMAL sector; IMMIGRATION policy; POLITICAL debates; DEPORTATION
- Publication
International Tax & Public Finance, 2017, Vol 24, Issue 6, p1050
- ISSN
0927-5940
- Publication type
Article
- DOI
10.1007/s10797-017-9444-5