DP8965 Sale of Visas: A Smuggler's Final Song?

Author(s): Emmanuelle Auriol, Alice Mesnard
Publication Date: May 2012
Keyword(s): legalisation, market structure, migration, migration policies
JEL(s): F22, I18, L51, O15
Programme Areas: Public Economics, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8965

We study how smugglers respond to different types of migration policies - legalisation through the sale of migration visas, or more traditional repressive policies through borders' enforcement, employers' sanctions or deportation - by changing the price they propose to illegal migrants. In this context a government that aims at eradicating smugglers and controlling migration flows faces a trade-off. Eliminating smugglers by the sale of visas increases the flows of migrants and may worsen their skill composition. In contrast, repressive policies decrease the flows of illegal migrants and may improve their skill composition but do not eliminate smugglers. We then study how a combination of increased repression -through reinforced external and internal controls- and sale of visas may be effective at eliminating smugglers and controlling migration flows while not weighing on public finances. Simulations allow us to quantify the partial equilibrium effects of the policies under study.