Trade Policy and Illegal Immigration

28 Pages Posted: 25 Apr 2005

See all articles by Subhayu Bandyopadhyay

Subhayu Bandyopadhyay

Federal Reserve Bank of St. Louis - Research Division; IZA Institute of Labor Economics; West Virginia University

Ryo Takashima

West Virginia University

Date Written: April 2005

Abstract

We use a version of the Meade model to consider the effects of interdependent import tariffs in the presence illegal immigration. First, we consider the small union case and derive the Nash tariff equilibrium for two potential members of a Preferential Trade Agreement (PTA). We analyze conditions under which a movement from the Nash equilibrium to complete intra-bloc tariff elimination (FTA) is likely to be welfare augmenting. The paper also considers how reduction of the external tariff may impact the Nash equilibrium tariffs of the potential bloc members. The analysis is extended to the large union case to consider the conditions under which terms of trade of bloc members improve with respect to the non-member nation(s).

Keywords: F11, F22

Suggested Citation

Bandyopadhyay, Subhayu and Takashima, Ryo, Trade Policy and Illegal Immigration (April 2005). IZA Discussion Paper No. 1568. Available at SSRN: https://ssrn.com/abstract=708177

Subhayu Bandyopadhyay (Contact Author)

Federal Reserve Bank of St. Louis - Research Division ( email )

411 Locust St
PO Box 442
St. Louis, MO 63011
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

West Virginia University ( email )

Morgantown, WV 26506-6025
United States
304-293-7879 (Phone)
304-293-7061 (Fax)

Ryo Takashima

West Virginia University ( email )

Morgantown, WV 26506
United States

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