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dc.contributor.authorGuzman, Mark G.eng
dc.contributor.authorHaslag, Joseph H.eng
dc.contributor.authorOrrenius, Pia M.eng
dc.description.abstractIn this paper we provide an alternative explanation for why illegal immigration can exhibit substantial fluctuations despite a constant wage gap. We develop a model economy in which migrants make decisions in the face of uncertain border enforcement and lump-sum transfers from the host country. The uncertainty is extrinsic in nature, a sunspot, and arises as a result of ambiguity regarding the commodity price of money. Migrants are restricted from participating in state-contingent insurance markets in the host country, whereas host country natives are not. We establish the existence of sunspot equilibria that are not mere randomizations over certainty equilibria. Volatility in migration flows stems from two distinct sources: the tension between transfers inducing migration and enforcement discouraging it and secondly the existence of a sunspot. Finally, we examine the impact of a change in tax/transfer policies by the government on migrationeng
dc.identifier.citationDepartment of Economics, 2003eng
dc.publisherDepartment of Economicseng
dc.relation.ispartofEconomics publicationseng
dc.relation.ispartofcommunityUniversity of Missouri-Columbia. College of Arts and Sciences. Department of Economicseng
dc.relation.ispartofseriesWorking papers (Department of Economics);WP 03-12eng
dc.subjectinternational migrationeng
dc.subject.lcshEmigration and immigrationeng
dc.titleA Role for Sunspots in Explaining Endogenous Fluctutations in Illegal Immigrationeng
dc.typeWorking Papereng

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