Illegal immigration, unemployment, and multiple destinations

Abstract

We develop a multicountry model of illegal immigration with equilibrium unemployment. Two geographic cases are considered. One has two destinations adjacent to the source country while the other has just one destination country adjacent to it. In both cases, the equilibrium border control proves insufficient compared with the joint optimum, calling for enforcement by federal authorities. Absent such authorities, delegating border control to the country with a larger native labor force can improve each destination country’s welfare. In contrast, the equilibrium internal enforcement policy is efficient, obviating enforcement by supranational authorities.