Effects of Employer Sanctions on Illegal Immigrants and Native Workers

By assuming a small open economy, we investigate the effects of employer sanctions on illegal immigrant employment and native worker welfare. For this purpose, we assume the non-shirk model to take the possible effects of employer sanctions on illegal immigrant utilities into account. We also assume that the probability that the government will discover illegal immigrant employment hardly increases with the resources invested by it and that all the costs of employer sanctions are financed by the fines imposed on the firms that employ illegal immigrants. In this paper, we demonstrate that even under these circumstances, strengthening employer sanctions cannot only reduce illegal immigrant employment but also can increase native worker welfare