Illegal Immigration Control and Wage Inequality

ABSTRACT This article investigates the effects of government regulation over illegal immigration on wage inequality through the general equilibrium approach. In the basic model of the short‐term analysis, increased control over illegal immigration will affect the skilled wage rate depending on the elasticity of substitution between capital and illegal immigrants in the urban informal sector, and will influence the domestic unskilled wage rate through both the formal‐sector skill‐intensity channel and the informal‐sector substitution channel between domestic unskilled labor and illegal immigrants. In the long‐term analysis, if the urban formal sector is more capital‐intensive than the urban informal sector, stricter immigration control will exacerbate wage inequality. In the two extended models, the results of the models may be similar to or different from those in the basic model.

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Publication Details

Journal
American Journal of Economics and Sociology
Published
2026-02-09
DOI
https://doi.org/10.1111/ajes.70030
Primary Topic
Migration and Labor Dynamics
Type
article
Field-Weighted Citation Impact
0.00
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article

Illegal Immigration Control and Wage Inequality

Xia Liu, Jiancai Pi
American Journal of Economics and Sociology
Migration and Labor Dynamics
article

Illegal Immigration Control and Wage Inequality

Xia Liu, Jiancai Pi
article en

Abstract

ABSTRACT This article investigates the effects of government regulation over illegal immigration on wage inequality through the general equilibrium approach. In the basic model of the short‐term analysis, increased control over illegal immigration will affect the skilled wage rate depending on the elasticity of substitution between capital and illegal immigrants in the urban informal sector, and will influence the domestic unskilled wage rate through both the formal‐sector skill‐intensity channel and the informal‐sector substitution channel between domestic unskilled labor and illegal immigrants. In the long‐term analysis, if the urban formal sector is more capital‐intensive than the urban informal sector, stricter immigration control will exacerbate wage inequality. In the two extended models, the results of the models may be similar to or different from those in the basic model.

American Journal of Economics and Sociology
Nanjing University of Finance and Economics (CN)
Decent work and economic growth
Openalex Percentile: Top 66%
Migration and Labor Dynamics
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