Welfare effects of illegal immigration

  title={Welfare effects of illegal immigration},
  author={Theodore Palivos},
  journal={Journal of Population Economics},
  • T. Palivos
  • Published 2009
  • Economics
  • Journal of Population Economics
This paper analyzes the welfare effect of illegal immigration on the host country within a dynamic general equilibrium framework and shows that it is positive for two reasons. First, immigrants are paid less than their marginal product, and second, after an increase in immigration, domestic households find it optimal to increase their holdings of capital. It is also shown that dynamic inefficiency may arise, despite the fact that the model is of the Ramsey type. Nevertheless, the introduction… 
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