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Reducing illegal immigration to South Africa: A dynamic CGE analysis

26 September 2012
Publication Type: Working Paper
JEL Code: C68, J61

South African authorities are attempting to limit inflows of illegal immigrants. Evidence for the United States presented in Dixon et al (2011) suggests that a policy-induced reduction in labour supply from illegal immigrants generates a welfare loss for legal residents. I use a similar labour market mechanism within a dynamic CGE model for South Africa, but take into consideration a number of well-known facts about the local economy. With high unemployment rates among low skilled workers and a legal minimum wage in place, I find a net gain in employment and welfare for legal residents in South Africa when reducing the inflow of illegal immigrants.

Series title: Working Paper 274
1 March 2012
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