Dokument

Summary:
This paper accounts for the interdependency between illegal and legal immigration and its effects on average migrant productivity as well as on the fiscal budget. I present a simple model which proposes that the host country's government can reduce the required skill level for legal entry in order to maximize the immigrant's average pro- ductivity. With regard to the fiscal surplus that is achieved by immigration, the model presumes that the government is encouraged to substitute illegal workers by legal ones if the former are characterized by lower tax benefit ratios or if over-qualification among unauthorized aliens is widespread.

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