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Fiscal Revenues and Commitment in Immigration Amnesties

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Reasons to grant immigration amnesties include the intention to reduce the weight of the informal sector and the attempt to identify employers of undocumented workers. However, it is incontestable that potential fiscal gains are important: tax revenues are crucial in all kinds of amnesties. Nevertheless, over the last 30 years 24% of applications have been rejected. It is still unexplained why governments accept this loss of fiscal base. We argue that applying for amnesty is basically selfincrimination, and that immigration-averse governments have an incentive to exploit the applications to identify and expel illegal workers. In our Nash equilibrium only applicants with the highest income are granted amnesty, and the poorest immigrants do not apply. In addition, it is not possible to establish a reputation because the players are different every time the game is repeated. Thus, fiscal revenues are sub-optimal and amnesties are an inefficient way to make illegal workers come forward.

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  • Francesco Magris & Giuseppe Russo, 2012. "Fiscal Revenues and Commitment in Immigration Amnesties," CSEF Working Papers 315, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:315
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    Cited by:

    1. Ismael Issifou & Francesco Magris, 2017. "Migration outflows and optimal migration policy: rules versus discretion," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 16(2), pages 87-112, August.
    2. Arye L. Hillman & Ngo Long, 2022. "Immigrants as future voters," Public Choice, Springer, vol. 190(1), pages 149-174, January.
    3. Claudio Deiana & Ludovica Giua & Roberto Nisticò, "undated". "Legalization and Long-Term Outcomes of Immigrant Workers," Development Working Papers 480, Centro Studi Luca d'Agliano, University of Milano.

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    More about this item

    Keywords

    Amnesty; illegal immigration; time consistency; incentive compatibility;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other

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