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Restricting Employment Of Low-Paid Immigrants: A General Equilibrium Assessment Of The Social Welfare Implications For Legal U.S. Wage-Earners

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  • PETER B. DIXON
  • MAUREEN T. RIMMER
  • BRYAN W. ROBERTS

Abstract

type="main" xml:lang="en"> This paper builds on earlier work that used a general-equilibrium model to show that reducing employment of unauthorized immigrants in the United States through a tighter border-security policy lowers the average income of legal residents. Here we exploit further the detail available in the general-equilibrium model to look at distributional effects, recognizing that the policy increases wage rates for low-paid legal workers. We assess the social welfare effect on legal workers using a constant elasticity of substitution social welfare function. We contrast our general-equilibrium approach to immigration analysis with the more commonly used partial-equilibrium, econometric approach. (JEL D63, J61, C68)

Suggested Citation

  • Peter B. Dixon & Maureen T. Rimmer & Bryan W. Roberts, 2014. "Restricting Employment Of Low-Paid Immigrants: A General Equilibrium Assessment Of The Social Welfare Implications For Legal U.S. Wage-Earners," Contemporary Economic Policy, Western Economic Association International, vol. 32(3), pages 639-652, July.
    • Handle: RePEc:bla:coecpo:v:32:y:2014:i:3:p:639-652
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    References listed on IDEAS

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    1. Antonio Spilimbergo & Gordon H. Hanson, 1999. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," American Economic Review, American Economic Association, vol. 89(5), pages 1337-1357, December.
    2. Gordon H. Hanson & Antonio Spilimbergo, 2001. "Political economy, sectoral shocks, and border enforcement," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(3), pages 612-638, August.
    3. George J. Borjas, 2021. "The Economic Benefits from Immigration," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 13, pages 411-430, World Scientific Publishing Co. Pte. Ltd..
    4. David Card, 2005. "Is the New Immigration Really so Bad?," Economic Journal, Royal Economic Society, vol. 115(507), pages 300-323, November.
    5. George J. Borjas, 2021. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 9, pages 235-274, World Scientific Publishing Co. Pte. Ltd..
    6. Wise, Donald E, 1974. "The Effect of the Bracero on Agricultural Production in California," Economic Inquiry, Western Economic Association International, vol. 12(4), pages 547-558, December.
    7. Peter B. Dixon & Martin Johnson & Maureen T. Rimmer, 2011. "Economy‐Wide Effects Of Reducing Illegal Immigrants In U.S. Employment," Contemporary Economic Policy, Western Economic Association International, vol. 29(1), pages 14-30, January.
    8. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2010. "Immigration and the Economic Status of African‐American Men," Economica, London School of Economics and Political Science, vol. 77(306), pages 255-282, April.
    9. Duffield, James A., 1990. "Estimating Farm Labor Elasticities To Analyze The Effects Of Immigration Reform," Staff Reports 278270, United States Department of Agriculture, Economic Research Service.
    10. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 869-924, December.
    11. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    12. Sherrie Kossoudji, 1992. "Playing Cat and Mouse at the U.S.-Mexican Border," Demography, Springer;Population Association of America (PAA), vol. 29(2), pages 159-180, May.
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    Cited by:

    1. Zahniser, Steven & Hertz, Thomas & Dixon, Peter B. & Rimmer, Maureen T., 2017. "The Potential Effects of Increased Demand for U.S. Agricultural Exports on Metro and Nonmetro Employment," Economic Research Report 262186, United States Department of Agriculture, Economic Research Service.
    2. Peter B. Dixon & Michael Jerie & Maureen T. Rimmer & Glyn Wittwer, 2017. "Using a regional CGE model for rapid assessments of the economic implications of terrorism events: creating GRAD-ECAT (Generalized, Regional And Dynamic Economic Consequence Analysis Tool)," Centre of Policy Studies/IMPACT Centre Working Papers g-280, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Vijay P. Ojha & Joydeep Ghosh & Basanta K. Pradhan, 2022. "The role of public expenditure on secondary and higher education for achieving inclusive growth in India," Metroeconomica, Wiley Blackwell, vol. 73(1), pages 49-77, February.
    4. P.B. Dixon & M.T. Rimmer, 2018. "Creating a labor-market module for USAGE-TERM: illustrative application, theory and data," Centre of Policy Studies/IMPACT Centre Working Papers g-283, Victoria University, Centre of Policy Studies/IMPACT Centre.
    5. Acharyya, Rajat & Kar, Saibal, 2017. "On Asymmetric Migration Patterns from Developing Countries," GLO Discussion Paper Series 4, Global Labor Organization (GLO).
    6. Nassios, Jason & Giesecke, James A. & Dixon, Peter B. & Rimmer, Maureen T., 2020. "What impact do differences in financial structure have on the macro effects of bank capital requirements in the United States and Australia?," Economic Modelling, Elsevier, vol. 87(C), pages 429-446.
    7. Dixon, Peter & Jerie, Michael & Rimmer, Maureen & Wittwer, Glyn, 2017. "Using a regional CGE model for rapid assessments of the economic implications of terrorism: creating GRAD-ECAT (Generalized, Regional And Dynamic Economic Consequence Analysis Tool," Conference papers 332900, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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