ABSTRACT
The welfare implications of international migration have been shown to depend on several factors. The United States and Mexico comprise a region within which a laborer can, either legally or illegally, migrate from one country to the other. The presence of market distortions and/or externalities can result in a misallocation of resources within and among countries and thereby affect the welfare of nonmigrant populations. Laborers are viewed as attempting to maximize their incomes so that whenever there exists a wage differential between the United States and Mexico, workers respond by migrating from the country of low wage to the country of high wage. The longer-term consequences of immigration must also take into account the effects arising from the general increase in the amount of labor relative to capital in the economy as well as any change which may occur in the overall composition or mix of labor skills.
