A role for government policy and sunspots in explaining endogenous fluctuations in illegal immigration
By: Mark G. Guzman, Pia M. Orrenius and Joseph Haslag.
Contributors: Orrenius, Pia M.; Haslag, Joseph H.
Series: Research Department working paper ;; 0305; Working paper (Federal Reserve Bank of Dallas. Research Dept. : Online) ;; 0305.
Publisher: Federal Reserve Bank of Dallas
Published: 2003
Place of publication: [Dallas, Tx.]
Language: eng
Format: Electronic resource
Subjects: Illegal aliens.; Sunspots.
Description: "In this paper we provide an alternative explanation for why illegal immigration can exhibit substantial fluctuations despite a constant wage gap. We develop a model economy in which migrants make decisions in the face of uncertain border enforcement and lump-sum transfers from the host country. The uncertainty is extrinsic in nature, a sunspot, and arises as a result of ambiguity regarding the commodity price of money. Migrants are restricted from participating in state-contingent insurance markets in the host country, whereas host country natives are not. We establish the existence of sunspot equilibria that are not mere randomizations over certainty equilibria. Volatility in migration flows stems from two distinct sources: the tension between transfers inducing migration and enforcement discouraging it and secondly the existence of a sunspot. Finally, we examine the impact of a change in tax/transfer policies by the government on migration"--Federal Reserve Bank of Dallas web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/26/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.