An Economic Analysis on Amnesty

Abstract

This paper analyzes the economic effect of amnesty and policies relevant to it with the two-country model which is founded on that of Bond and Chen(1987). And it draws following conclusions.

If amnesty is carried out more frequently in the case of no unemployment, the total income of all the world will increase, but the wage rate of legal unskilled workers in it will decrease. So it is possible that unemployment will come out if the operation of amnesty is continued to be frequent. If amnesty is carried out more frequently in the case of unemployment being in both the host country and the source country, the unemployment will increase in the former and decrease in the latter, the total income of all the world will not change.

One way to decrease illegal workers in the host country while preventing unemployment coming out in it is to carry out amnesty more frequently with increasing penalty for the employers of them. Another way is to increase the regular number of acceptable foreign workers in order to increase the number of the workers who enter the host country with working permits. But it doesn’t make illegal workers become legal ones like amnesty.