Illegal migration and economic growth: simulation analysis in an international context

Abstract

This paper calibrates the dynamic illegal migration model studied by Hazari and Sgro (2003) to eight countries. We find that if illegal migrants and domestic labor are perfect substitutes in production, the presence of illegal migrants lowers domestic welfare between 0.09% and 2.93% among eight countries. Moreover, we show that there is a tradeoff between the long-run domestic wage rate and rental rate of capital from receiving illegal migrants.calibration