Illegal migration and policy enforcement

Workers from a source country consider whether or not to illegally migrate to a host country. This decision depends crucially on the proportion of workers who migrate and on whether or not the host country government decides to regularize them. When there is no uncertainty about economic conditions in the host country, there are multiple equilibria where workers may migrate or not and the government may regularize them or not. When uncertainty is introduced, we show that there exists a unique equilibrium where each state of the world gives rise to a unique outcome in terms of migration and regularization. (C) 2016 Elsevier B.V. All rights reserved.