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.
Cite this paper
Issifou, I. and Magris, F. (2014) Fiscal Policy and Optimal Immigration Quotas. Theoretical Economics Letters
, 574-578. doi: 10.4236/tel.2014.47072
 Borjas, G.J. (2003) The Labor Demand Curve Is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market. The Quarterly Journal of Economics, 118, 1335-1374. http://dx.doi.org/10.1162/003355303322552810
 Bertoli, S., Brücker, H., Mayda, A.M. and Peri, G. (2009) The Battle for Brains. Report. For the Fondazione Rodolfo de Benedetti, Milan.
 Facchini, G. and Mayda, A.M. (2012) Individual Attitudes towards Skilled Migration: An Empirical Analysis across Countries. The World Economy, 35, 183-196. http://dx.doi.org/10.1111/j.1467-9701.2011.01427.x
 Bhagwati, J.N. and Hanson, G.H. (2009) Skilled Immigration Today: Prospects, Problems, and Policies. Oxford University Press, New York.
 Magris, F. and Russo, G. (2006) Fiscal Revenues and Commitment in Immigration Amnesties. Working Paper 315. Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
 Hatton, T.J. (2014) The Slump and Immigration Policy in Europe. Working Paper ID 2403122. Social Science Research Network.
 Hanson, G.H., Scheve, K. and Slaughter, M.J. (2007) Public Finance and Individual Preferences over
Globalization Strategies. Economics & Politics, 19, 1-33. http://dx.doi.org/10.1111/j.1468-0343.2007.
 Facchini, G. and Mayda, A.M. (2009) Does the Welfare State Affect Individual Attitudes toward Immigrants? Evidence across Countries. Review of Economics and Statistics, 91, 295-314. http://dx.doi.org/10.1162/rest.91.2.295
 Epstein, G.S. and Weiss, A. (2011) The Why, When, and How of Immigration Amnesties. Journal of Population Economics, 24, 285-316. http://dx.doi.org/10.1007/s00148-009-0280-5
 Passel, J. (2006) The Size and Characteristics of the Unauthorized Migrant Population in the US Report. Pew Hispanic Center Research.
 Hoefer, M., Rytina, N. and Baker, B.C. (2011) Estimates of the Unauthorized Immigrant Population Residing in the United States: January 2011. Report. Office of immigration Statistics, Policy Directorate, United States Department of Homeland Security, Washington DC.
 Bertoli, S., Moraga, J.F.-H. and Ortega, F. (2011) Immigration Policies and the Ecuadorian Exodus. The World Bank Economic Review, 25, 57-76. http://dx.doi.org/10.1093/wber/lhr004
 Djajic, S. (1999) Dynamics of Immigration Control. Journal of Population Economics, 12, 45-61.
 Myers, G.M. and Papageorgiou, Y.Y. (2000) Immigration Control and the Welfare State. Journal of Public Economics, 75, 183-207. http://dx.doi.org/10.1016/S0047-2727(99)00033-X