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We develop a multicountry model of illegal immigration with equilibrium unemployment. Two geographic cases are considered. One has two destinations adjacent to the source country while the other has just one destination country adjacent to it. In both cases, the equilibrium border control proves insufficient compared with the joint optimum, calling for enforcement by federal authorities. Absent such...
ABSTRACT We analyze the impacts of migration and of labor market integration on the distribution of skills and the wage structure in both the short and the long run. To do so, we develop a framework where workers have heterogeneous skills and where in‐migration expands the range of available skills in the economy. In the short run, this expansion leads to productivity gains, which may more than offset...
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