The Welfare Effects of Border Enforcement on Illegal Immigration

Abstract

This chapter extends Ethier’s (1986a) one, small-country model of illegal immigration by constructing a standard (two-country, one-good, two-factor) model. The host country introduces a border enforcement policy to catch illegal would-be migrants from the foreign country at the border between two countries. We examine the effects of this policy on the welfare of the host country, the foreign country, and the two countries combined (i.e. global welfare), both in the presence and in the absence of capital mobility. Our main result under capital immobility is that border enforcement reduces host country welfare, foreign country welfare, and global welfare. Under capital mobility, we find that border enforcement increases foreign country welfare and global welfare and, under certain conditions, increases host country welfare.