ILLEGAL MIGRATION AND CAPITAL MOBILITY UNDER MINIMUM WAGE LEGISLATION

摘要

Using Ramaswami-Bond-Chen's simple general equilibrium framework, this paper analyses illegal migration from a less developed country to a developed country, where the less developed country has minimum wage legislation of the Harris-Todaro type. The analysis is carried out under the assumption that capital is internationally mobile. The study finds that an intensification in enforcement of anti-immigration policy in the developed country actually encourages illegal migration and that a rise in the minimum wage reduces illegal migration and improves the welfare of the less developed country.