ILLEGAL IMMIGRATION AND RESOURCE-ALLOCATION

This paper studies the effects of illegal immigration and the associat ed expansion of the underground economy on the allocation of resources , commodity prices, and wages of workers, both in the short run (when occupational mobility is restricted) and in the long run (when the ski ll-composition of the labor force is endogenous). The paper goes on to consider some of the fiscal implications of illegal immigration and t he related expansion of underground activity. Effects of sanctions aga inst employers hiring illegal aliens and measures to legalize the stat us of clandestine foreign workers are also examined.