The CPC Seminar Series takes place between October and June, all seminars are free to attend and no registration is required. If you would like to present please contact email@example.com.
21st March 2013 4pm, University of Southampton, 58/1041
Giuseppe Russo, Universita di Salerno and Centre for Studies in Economics and Finance
This is a joint CPC and Economics seminar
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 self-incrimination, 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. Thus, fiscal revenues are sub-optimal and amnesties are an inefficient way to make illegal workers come forward.