Immigration amnesties aim at reducing the size of the informal sector and identifying employers of undocumented workers. However, potential fiscal gains are also important: tax revenues are crucial in all kinds of amnesties. Nevertheless, over the last thirty years an average of 24% of all applications have been rejected. It remains an open question as to 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 use applications as a means to identify and expel illegal workers. In equilibrium only applicants with the highest income are granted amnesty, while the poorest immigrants do not apply, and fiscal revenues remain sub-optimal. We show that electoral accountability can solve the commitment problem. However, the large number of rejections suggests that the strict voter-coordination required by this mechanism is hard to obtain in practice. Therefore immigration amnesties seem doomed to inefficiency.

Fiscal Revenues and Commitment in Immigration Amnesties

Magris F.;
2016-01-01

Abstract

Immigration amnesties aim at reducing the size of the informal sector and identifying employers of undocumented workers. However, potential fiscal gains are also important: tax revenues are crucial in all kinds of amnesties. Nevertheless, over the last thirty years an average of 24% of all applications have been rejected. It remains an open question as to 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 use applications as a means to identify and expel illegal workers. In equilibrium only applicants with the highest income are granted amnesty, while the poorest immigrants do not apply, and fiscal revenues remain sub-optimal. We show that electoral accountability can solve the commitment problem. However, the large number of rejections suggests that the strict voter-coordination required by this mechanism is hard to obtain in practice. Therefore immigration amnesties seem doomed to inefficiency.
2016
26-nov-2015
Pubblicato
https://www.sciencedirect.com/science/article/pii/S017626801500097X?via=ihub
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11368/2967221
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