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Illegal immigration, technology adoption and welfare

journal contribution
posted on 2013-01-01, 00:00 authored by Munirul NabinMunirul Nabin, Pasquale SgroPasquale Sgro
A debate in the illegal immigration and technology adoption literature suggests that hiring illegal immigrants may be hindering the adoption of new technology, which in turn harms a country’s productivity growth. This paper analyses an individual firm’s behaviour regarding new technology adoption in the presence of illegal immigrants. We assume a Ricardian economy and analyse immigration of illegal unskilled workers in a model of Cournot duopoly where firms are producing homogenous and non-traded goods, and hiring illegal immigrants. A two-stage simultaneous move game is set up: in Stage 1, given the opportunity of hiring illegal immigrants, an individual firm decides whether to adopt the new technology or not, where technology adoption is costly. In Stage 2, each firm will choose the Cournot output level. Solving this two-stage game, we conclude that (i) given the opportunity of hiring illegal immigrants, an individual firm may adopt the new technology and (ii) in the case of zero tolerance of illegal immigration, technology adoption may increase but such technology adoption is immiserizing as it reduces the total surplus.

History

Journal

Asia-Pacific journal of accounting & economics

Volume

20

Pagination

183-198

Location

Kowloon, Hong Kong

ISSN

1608-1625

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2013, Routledge

Issue

2

Publisher

Taylor & Francis

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