CoPS/IMPACT Working Paper Number G-183

Title: Reducing Illegal Migrants in the U.S.: A Dynamic CGE Analysis

Authors: Peter B. Dixon, Martin Johnson and Maureen T. Rimmer


We use an economy-wide model to analyze the effects of three broad programs to reduce illegal immigrants in U.S. employment: tighter border security; taxes on employers; and vigorous prosecution of employers. After looking at macroeconomic, industry and occupational effects, we decompose the welfare effect for legal residents into six parts covering changes in: producer surplus and illegal wage rates; skilled employment opportunities for natives; aggregate capital; aggregate legal employment; the terms of trade; and public expenditure. The type of program matters. Our analysis suggests a prima facie case in favor of taxes on employers.

JEL classification: J61, C68.

Keywords: Illegal immigration; dynamic modeling; U.S. immigration policy.

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