Creating Illegal Immigrants

Abstract. This paper considers the prospects for successful implementation by governments of guest-worker programs that are based on an intended tem-porary presence of foreign workers. A means of enforcement of temporary presence is a penalty imposed for overstaying the permissible time period. Employers who are obliged to post bonds for their foreign workers are pro-vided with an incentive to ensure that their workers leave at the end of their contractually speci®ed stay. We consider the consequences of such a bond when foreign workers can leave legal employers for illegal employment. We also investigate the e¨ectiveness of deferred payments to foreign workers as a means of discouraging transition from legal employment to illegal presence. In the ®nal analysis, although the policy intention is a temporary stay, we con-clude that if foreign workers do not wish to return home, there is an almost inevitability to the creation of a population of illegal immigrants (whose presence may be subsequently legalized)