Illegal Migration, Enforcement and Minimum Wage

31 Pages Posted: 2 Jul 2007

See all articles by Gil S. Epstein

Gil S. Epstein

Bar-Ilan University - Department of Economics; IZA Institute of Labor Economics; University College London - CReAM - Centre for Research and Analysis of Migration

Odelia Heizler-Cohen

Hebrew University of Jerusalem; IZA Institute of Labor Economics

Date Written: June 2007

Abstract

This paper examines the connection between illegal migration, minimum wages and enforcement policy. We first explore the employers' decision regarding the employment of illegal migrants in the presence of an effective minimum wage. We show that the employers' decision depends on the wage gap between those of the legal and illegal workers and on the penalty for employing illegal workers. We consider the effects a change in the minimum wage has on the employment of illegal immigrants and local workers. We conclude by considering the optimal migration policy taking into consideration social welfare issues.

Keywords: illegal immigration, migration policy, minimum wage, interest groups

JEL Classification: E24, F22, J31

Suggested Citation

Epstein, Gil S. and Heizler-Cohen, Odelia, Illegal Migration, Enforcement and Minimum Wage (June 2007). IZA Discussion Paper No. 2830. Available at SSRN: https://ssrn.com/abstract=997259

Gil S. Epstein (Contact Author)

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+972 3 531 8937 (Phone)
+972 3 535 3180 (Fax)

HOME PAGE: http://faculty.biu.ac.il/~epsteig/

IZA Institute of Labor Economics ( email )

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

University College London - CReAM - Centre for Research and Analysis of Migration ( email )

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

Odelia Heizler-Cohen

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, IL Jerusalem 91905
Israel

IZA Institute of Labor Economics

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

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