TITLE:
Fiscal Policy and Optimal Immigration Quotas
AUTHORS:
Ismaël Issifou, Francesco Magris
KEYWORDS:
Fiscal Policy, Skill Level, Immigration Quotas
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.7,
August
8,
2014
ABSTRACT: We consider a destination
country with an aversion toward legal and illegal migration. Candidate migrants
differ in terms of skills level and the legal migrants pay income taxes. There
is a positive probability to become clandestine once a candidate migrant is
rejected. We show that the government will give the priority to candidate
migrants with high skills. We derive the optimal quotas of the legal
immigration and show that the number of legal migrants increases as soon as the
probability of entering into the destination country illegally becomes larger.