SOPEMI

TRENDS IN INTERNATIONAL MIGRATION

Continuous Reporting System on Migration

ANNUAL REPORT

1999 EDITION

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Part III* CLANDESTINE IMMIGRATION: ECONOMIC AND POLITICAL ISSUES1

Introduction the regulations governing access to the labour mar- ket. By definition, clandestine immigration eludes Considered over a long period of time (since the registration and statistical coverage. The first diffi- 1970s), and against a backdrop of otherwise moder- culty confronting one is that of how to define and ate growth in international migration (Tapinos and measure clandestine immigration. Delaunay, 1998), the increase in the variety of forms Convention No. 143 adopted by the 1975 ILO of clandestine residence and the growing length of Conference defines clandestine or illegal migration stay of clandestine immigrants have had the effect of movements as those where migrants find themselves virtually reducing the debate on immigration policy “during their journey, on arrival or during their period to one on the issue of clandestine immigration. The of residence and employment [in] conditions contra- curbing of illegal inflows and of foreigners’ irregular- vening relevant international multilateral or bilateral ity with regard to residence and employment has instruments or agreements, or national laws or regu- become one of the priorities of migration policy. This lations” (Moulier Boutang, Garson and Silberman, policy orientation is now common to all the countries 1986). This definition places the stress on the diverse of Europe, particularly the new countries of immigra- aspects of irregularity: entry, residence in the host tion in the south (i.e. Italy, Spain, Greece and Portu- country and the undertaking of an occupation. gal), as well as to North America, although the United In a world without restrictions on entering or States and Canada are still open to regular immigra- leaving a country, illegal immigration would be a tion. concept without reference. Unless there simulta- To examine the economic and political chal- neously exists both restrictions and a degree of toler- lenges deriving from clandestine migration is to ance illegal immigration cannot take place. It is a investigate whether clandestine migration possesses manifestation of an imbalance between the effec- specific features as compared to regular migration. It tively unlimited supply of candidates for emigration is from such a perspective that this paper considers and the limitations placed by recipient countries on the problems of measurement, the economic dimen- the acceptance of new entrants. sion and control policies. In countries like the United States and Canada which remain essentially open to immigration, illegal A. ILLEGAL MIGRATION immigration is an alternative entry procedure for those who do not meet the required criteria, for those 1. Illegal migration: a multi-faceted concept who would have to wait longer than they would wish in The extent of States’ sovereignty defines the order to obtain an immigrant’s visa, as well as for those scope of clandestine migration flows. The clandes- for whom unauthorised immigration is less expensive. tine nature of such migration is defined by reference Where opportunities for entering and staying in a to the rules of law (and their shortcomings), the country are limited, as in Europe at the present time, restrictions on entering and leaving a country, and illegal entry is, excepting being the subject of a family

* This special chapter was written by Mr. Georges Tapinos, Professor, Institut d’études politiques de Paris, Consultant to the OECD Secretariat. The views expressed are those of the author and do not commit either the Organisation or the national authorities. 229

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reunion application or applying for asylum, the only the situation develops over time. When Spain and option available to candidates for migration. In the Italy, emigration countries par excellence, began to cases of both types of country, once there exists a accept immigrants at a time when traditional Euro- statutory maximum length of stay, whether this pean immigration countries were closing their bor- depends on the type of visa (e.g. for tourists, students ders to immigration, the authorities in these and temporary workers) or whether indeed there is countries liked to think they were countries of first any obligation to have a visa at all, overstaying2 places entry. By the late 1980s and early 1990s, it had the person concerned outside the law. become clear that these countries had in turn This fundamental distinction is easier to draw in become settlement countries with a significant num- the United States where there exists at entry a statu- ber of clandestine immigrants. tory dividing line between immigrants and non- The examination of clandestinity cannot be immigrants, and where the statistical system esti- reduced to the clandestine migrant himself. The mates the number of non-immigrants by counting analysis of the phenomenon and the formulation of those who do not amend their status after entry, policies to combat it should look at the whole length whose departure from the country is not registered, of the chain of clandestinity, which brings into play a and who are assumed to be still in the country after series of agents: the migrant, the intermediary who the expiry date of their visa. facilitates his passage or placement, the company for In European countries, where no such distinc- whom the migrant works and, according to the case, tion is made on entry, overstaying usually occurs the principal contractor. One is therefore confronted when an immigrant is turned down after applying for by a wide array of complex situations and circuits the obtention or renewal of a residence permit. This which range from the arrangement of the meeting situation, the reflection of rules governing legal resi- between the clandestine immigrant and the employer dence, can result not only from wilfulness on the part through to far-reaching and powerful organisations of migrants but also from the ambiguity or incoher- which control a veritable trade in labour. In America, ence of the rules themselves. For example, in coun- workers from Mexico or Central America endeavour to tries like Italy and Spain where there have been cross the border with the help of a smuggler, who frequent regularisation programmes and where a might also arrange their obtention of employment. permit obtained at the time of a regularisation exer- Elsewhere, nationals of sub-Saharan Africa enter cise is normally limited to a period of one year, with Algeria by aeroplane, continue their journey by land the possibility (non-automatic) for it to be renewed, through to the Spanish enclave of Melilla in Morocco repeated regularisations of the same people have in the hope of being transported to Spain at the time been observed. By contrast, in the United States, of a regularisation programme. those who benefited from the amnesty law of 1986 The organisations involved in smuggling opera- [the Immigration Reform and Control Act (IRCA)] tions can be of considerable scale. In the United States, obtained permits enabling them to remain in the the INS dismantled in 1998 an organisation which had country until they met conditions for the obtention of arranged the passage to the United States of approxi- a permanent residence permit (Green Card). mately 10 000 people; in November of the same year Illegal immigration also has a time dimension as two million fake identification papers were seized in it can be defined by length of stay. From the immi- Los Angeles (INS, March 1999). The clandestine chain grant’s point of view, illegality may represent either a sometimes goes further back than the migrant himself. temporary phase in the migration cycle (as was the For example, the Moroccan youths who are known to case in France during the 1960s where there existed have entered Europe were not, as one might have sup- the possibility for illegal immigrants to be regu- posed, unoccupied youths who had taken the initiative larised) or a permanent state (in the absence of reg- to emigrate clandestinely, rather they had been sent by ularisation or when regularisation is exceptional and their parents who had elected to take advantage of non-renewable – which is what American regularisa- their children’s minority which, in Europe, protects tion in 1986 and the regularisation programmes them against expulsion. This extreme heterogeneity recently undertaken in European countries are should rule out judgements on this phenomenon made assumed to be). This distinction also holds from the on purely humanitarian or, conversely, purely criminal point of view of the recipient country, which may be bases. either a country of first entry or one where the immi- These distinctions have considerable implica- 230 grant intends to settle permanently. In this regard, tions for the measurement and characterisation of

OECD 1999 Clandestine Immigration: Economic and Political Issues illegal migrants, the economic impact of illegal migra- the volume of the flows of people entering the country tion, administrative effectiveness and the aspect of without the required legal administrative documen- control policy. tation, whether they cross the frontier with false papers or at a point that is not controlled. By con- 2. Measurement methods trast, irregularity in respect of those who reside con- cerns stocks which comprise both the net cumulative Estimating the number of people in an irregular flows of people who have entered without authorisa- situation is inherently problematic. Account must be tion and are not regularised, and those who have taken not only of the legal system of immigration, the entered clandestinely but have lost their right of res- system of statistical observation and mechanisms idence and are still in the country. It should also be involved in undocumented living, but also, given considered as essential, in so far as the employment that such estimates rely to varying degrees on survey status of those in an irregular situation will also, logi- evidence, of the perception that the clandestine cally, be irregular too, to attempt to measure the migrants have of the acceptance of their clandestin- number of foreigners in irregular employment. ity by the local population and of the nature of the risks that they are taking. Defining the groups in these ways allows one to distinguish the possible estimates, those of: clandes- In that it concerns the measurement of an unob- tine entrants (inflow of illegal migrants over a given servable event, the measurement of irregular migra- period), clandestine residence (the total foreign popula- tion runs into well-known problems. The difficulties tion residing in the country illegally at a given are particularly severe in the case of clandestine moment) and clandestine workers (the number of clan- migration for whilst measurement in this field can destine workers in employment at a given moment). only be indirect, the absence of regularities in the phenomena that might be linked to this form of Chart III.1. summarises the different entry, resi- migration limits the usefulness of indirect methods. dence and employment situations in which foreign Indeed, the classic demographic distinction between migrants can find themselves. It is possible to iden- direct and indirect methods is hard to sustain. tify six categories of clandestinity: Strictly speaking, one rarely has direct observations A. Migrants who have entered the country at one’s disposal. At best, observations are incom- legally with a legal residence permit, but who plete; in every case complementary information is are working illegally either because the job is required – which is itself often estimated – for the not declared or because their residence per- phenomenon to be satisfactorily understood. mit does not allow them to work. Figures for apprehensions in border regions, for B. Migrants who have entered the country example, have to be adjusted to take account of the legally, who are living in the country illegally number of times that individual migrants attempt to (either because their work permits are invalid cross. Figures derived from regularisation pro- or have expired, or because they do not have grammes need to be amended to take account of residence permits), and who are working ille- those excluded for failing to meet the criteria (partic- gally. It is assumed that a migrant without a ularly those relating to the date of arrival, the obliga- residence permit cannot work legally under tion to remain in the country continuously, and the the legislation in force. presentation of a work permit). Similarly, surveys that C. The same category as above, but covering focus directly on the clandestine population (“snow- inactive migrants. ball” sampling or the Delphi technique) which pre- sume to identify from the outset people who are D. Migrants who have entered the country clan- known to be in an irregular situation contain substan- destinely, who have no residence permit, and tial biases. Measurements made in the frontier zones who are working illegally. of sending countries before migrants cross the fron- E. The same category as above, but covering tier (cf. the Mexican COLEF survey) constitute an inactive migrants. exception. F. Migrants who have entered the country It is important first of all to know what one is clandestinely, who have a residence permit measuring. Is it numbers (stocks) or movements (e.g. following regularisation, or by variation in (flows)? Is it workers or the whole of the population? their status through marriage) and are working To measure clandestine entries, is to attempt to assess illegally. 231

OECD 1999 Trends in International Migration Legal in order) employment (work permit Inactive population Legal residence Regularisation status (through marriage...) Adjustment of residence – – Illegal Illegal employment undeclared activity the residence permit does not allow to work false identity papers clandestine passage absence of inspection – – – – – Inactive population Illegal residence (lack of residence permit) Illegal activity) (undeclared employment ENTRIES Illegal activity) (undeclared employment Inactive Illegal residence population invalid or out-of-date residence permit lack of residence permit – – ACBDEF legal Illegal employment undeclared activity the residence permit does not allow to work Administratively (papers in order) – – Presentation of the various situations in which foreign migrants can find themselves Legal in order) employment (work permit Legal residence Chart III.1. (residence permit in order) Inactive population

232 ENTRY RESIDENCE EMPLOYMENT

OECD 1999 Clandestine Immigration: Economic and Political Issues

The problem is how to go from administrative residence (for example, from regularisations and statistics, which are marked by characteristics spe- refusals of asylum). Such information constitutes the cific to each country, to a method of measuring the basis for only an imperfect measure. This is why phenomenon.3 Most methods rely on data from the recourse to indirect estimation methods is neces- recipient country, and they are based on two kinds of sary. logic with the estimate of the stock of clandestine Estimates based on the population of sending immigrants made either by comparing statistics on countries are really an application of classical entry and modifications to status with data relating to expected-population and gender ratio methods stocks, or by using comprehensive registers of demo- integrating additional information derived from graphic events such as births and deaths. data from immigration countries. The “expected Methods of estimating the clandestine popula- population” method involves a comparison between tion were first developed and applied in the United expected and observed stocks broken down by age States. Direct calculation, through comparing entry and gender in two successive censuses. Starting from statistics and modifications to status from INS (Immi- the population distribution on that date (t), and gration and Naturalization Service) data, permitted allowing for deaths and births registered or esti- the inference of the number of visa overstayers. To mated during the period (t, t + k), the difference this component of the stock of clandestine immi- between the population actually observed and that grants should be added clandestine entrants (entries extrapolated in (t + k) gives an estimate of the send- without inspection) estimated by means of an indirect ing country’s net migration during the inter-census procedure (Warren, 1994). period. Evaluating clandestine migration involves “Residual” estimating is based on census data. comparing this net migration estimate with variations From the total foreign-born population counted at the in stocks (or in net migration) registered world-wide time of the census, 1990 say, and the theoretical legal for nationals of these countries which necessitates foreign-born population estimated for the same point knowledge of the stocks in recipient countries of the in time from INS figures, an estimate of the popula- nationals of the country concerned. Such a method is tion of clandestine immigrants picked-up by the cen- appropriate only under the hypothesis that the sus can be obtained by subtracting one from the nationals of the country concerned migrate to a very other. To be of analytical interest, the censuses small number of countries. would have had to have counted a high proportion of The second method focuses on the high propor- the illegal migrants (Clark, Passel, Zimmermann and tion of men among clandestine migrants; this is Fix, 1995). Mention should also be made of estimates observed by default in gender ratios (women appear of clandestine entries arrived at by adjusting the to be in a majority) of populations counted in send- number of arrests on the basis of the likelihood of ing countries. An estimate of those missing is then being apprehended at the United States-Mexico bor- possible if one knows the ratios of men among those der (Espenshade, 1995). remaining and among all nationals registered both in In Europe, measurement of clandestine migra- their own countries and abroad. These indirect meth- tion has been attempted only relatively recently. The ods are not reliable. A small weakness in one of the wide range of methods contemplated and used is a links of the estimating chain (e.g. in census coverage, reflection of the similarly wide range of statistical or in measuring the death rate) can easily lead to a observation systems employed but is above all tes- substantial variation in the measure of clandestinity. tament to the exploratory nature of these first Furthermore, they only provide an overall estimate attempts. Tables III.1 and III.2 summarise the results of the number nationals who are living abroad; their of comparative research carried out by Eurostat in distribution by recipient country would remain some ten European countries; its objectives were to unknown. compile a register of methods used in the various In so far as clandestine immigrants work in the countries and to suggest viable procedures in the light hidden economy, it will be possible to consider an of the kind of data available (Delaunay and Tapinos, estimate of clandestine immigration as a by-product 1998). In practice, the measurement is based on of a measurement of the hidden economy,4 defined direct observation of the individual in a an irregular as those activities which evade payment of tax and situation or considered likely to be so, either at the social security contributions. This approach has two moment of his crossing the border (for example data limitations: firstly, with a few exceptions, clandestine on apprehensions and forced departures), during his migrant workers account for only a small proportion 233

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Table III.1. Typology of the methods used to estimate clandestinity

 Visas/entries 1 Statistics on refusals  Political asylum 2   Residence and work permits 3   Entry/border 4 Administrative statistics  Infractions  Stay 5  Work or job 6   Mass 7 Direct measures Regularisations    Exceptionnal 8  Without sample Delphi “method” 9  “Snowball” technique 10 Surveys  At the time of the regularisation 11  With sample  On employment 12  On mobility/border flows 13  Biographical 14  Expected populations 15 Comparison of sources    Pairing of files 16 Sex-ratio 17  Common law crimes 18 Indirect estimates  Inferences from secondary events  Births and deaths 19  Statistics on school attendance 20  Social/health benefits 21 Work statistics National data 22

Source: Delaunay, Tapinos, 1998.

of those clandestinely employed; secondly, the attempts, conducted in conformity with the proce- methods used to measure the hidden economy dures of scientific research, to arrive at a statistical reflect concerns linked to taxation and national sta- measurement. Most certainly, there is no guarantee tistics (e.g. the amount of, and growth in, GDP), and that the measurements arrived at on the latter basis are not directly concerned with the legal status of will more closely correspond to reality than those migrant workers. Moreover, in the hidden economy based on the former approach. However, that their the dividing line between clandestine employment method of calculation, the field covered, the hypoth- and registered employment tends to be very difficult eses used and statistical biases are all explicit does to draw (see below). present a considerable advantage. Such an The most elaborate attempts to estimate the approach, in offering the possibility of subjecting to number of clandestine foreigners by measuring the comparison the results obtained through a variety of hidden economy have been made in Italy. They have statistical methods, is the sole means of coming close relied on observed divergences in the national to an accurate estimate. accounts between declared added value and esti- The issue is not so much the number of clandes- mates of added value based on average productivity tine immigrants but rather the characteristics and the throughout a given sector and anomalies observed in mechanisms of the reproduction of clandestinity: changes in participation rates. these give real meaning to the estimate of the stock Three concluding remarks on these measure- obtained. The stock of clandestine immigrants ment methods: results from the difference between their inflow and It is not possible to place on the same plane, on outflow and depends therefore on the average the one hand, the innumerable guestimates (guess length of time spent in the state of clandestinity. It is estimates) that tend rather to reflect the feeling of of some importance to know the relative extents to anxiety (or the need to give reassurance) that their which a change in the stock of clandestine immi- authors feel with regard to clandestine immigration grants is due to a change in inflows and a change in 234 and, on the other hand, the difficult and imperfect the average duration of clandestine stay.5

OECD 1999 Clandestine Immigration: Economic and Political Issues

Table III.2. Tested or concieved methods to estimate clandestinity

Method Europe United Kingdom Belgium France Greece Netherlands Italy Portugal Czeck Rep. Switzerland Visa refusals 1 Entry refusals 1 Passenger cards Entry/Exit Apprehensions at border 4 Biographical inquiries 14 Surveys on flows 13 Breaches of residence regulations 5 Refusals of residence permits 3 Refusals of political asylum 2 Regularisations 8 Common law crimes 18 Comparison of sources 16 Residence Deaths and births 19 Expected populations 15 Sex-ratio 17 School, social assistance 21 Delphi Method 10 Surveys by stage 11 National data 22 Work Employment infraction 6 Surveys on irregular employment 12 Methods being applied Collaborators' proposals

Irregular migration is by definition a breach of gal labour immigration linked to the foreign workers’ immigration law, and we have long pretended that it legal status? was an exceptional phenomenon. This allowed us to In the standard model of the labour market, the believe that we were dealing with a problem to which incidence of immigration, legal or illegal, depends on we had to find a solution. This confusion between the nature of the migration process and the degree to normative and positive had the effect of concealing which immigrants and nationals complement or sub- the need to put in place a statistical apparatus that stitute one another. In this way, one may contrast the would provide for both measurement and the carry- situation according to which immigration derives ing out of longitudinal surveys with a view to under- from an economy-wide or sectoral labour shortage standing the mechanisms of migration and the and may therefore be seen as endogenous, with that characteristics of clandestine migrants. Clandestine where immigration is exogenous and likely to engen- immigration is not an exceptional, non-renewable der competition with the pre-existing domestic event. It is an inevitable phenomenon, one that is labour supply. Under this latter hypothesis, which likely to grow as globalisation, economic transition standard labour market theory assumes to be the and inter-ethnic conflict continue. case, the equilibrium wage falls; the quantitative impact on the employment of nationals depends on B. THE ECONOMIC IMPACT the (downward) elasticity in the supply of nationals’ labour compared with the (upward) elasticity of Is there an economic dimension that is specific employers’ total labour demand. A significant dis- to illegal migration as compared to legal migration? placement effect is only observed where a lower To what extent are the economic implications of ille- equilibrium wage rate leads to a substantial with- 235

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drawal by nationals from the labour market without a costs, plentiful information on wages, and competition significant increase in labour demand. between employers), there was no difference between the working hours of legal and illegal work- The empirical scope of such a prediction is ers. From this, the author concluded that preferences dependent on the extent to which we can determine in respect of working hours are independent of a the elasticity of the various segments of the work- worker’s legal status. force’s labour supply (e.g. with regard to age, gender, marital status and skills) and the nature of changes in The advantages of illegal migration tend to be labour supply (e.g. variations in participation rates, on the employers’ side. In that the migrant’s illegal hours worked, etc.). Another school of thought sees status vis-à-vis his residence or employment places labour market segmentation as a key factor underly- him in a situation of marked dependence rendering ing the resort to immigrant workers. Layard, Nickell him more willing to accept a very low wage, often and Jackman (1991) suggest, given the differing char- below the legal minimum, the employer might acteristics of jobs in the primary and secondary sec- expect to benefit. The threat of being caught weigh- tors, that a fall in wage rates in the primary sector ing on the migrant is for the employer a source of pro- causes labour demand to rise, whereas a fall in wage tection against being penalised himself. And rates in the secondary sector causes labour supply to conversely, legal residence status combined with fall. This could be expected to have a positive impact semi-clandestine employment status can represent on the employment of foreigners in the latter sector. for the employer an advantage in so far as they allow a part of the work undertaken by the migrant to go Could the anticipated effects be extended to undeclared or for the migrant to be considered as an irregular immigration? The highlighting of an effect independent worker. The monograph recently pub- that is specific to irregular immigration or irregular lished by Iskander (1999) on the garment fabrication employment would necessitate an examination of sector in Paris and the Parisian suburbs shows that the behaviour of labour supply and demand and the employers’ preference for one or the other of these institutional variables that influence it (in particular situations depends on whether the firm’s strategy is the existence of an informal sector) and the specific oriented more towards producing a quality product impact of illegal immigration at a macroeconomic or to the minimisation of wages. There exists for the level with regard to resource allocation, distribution employer, leaving aside the cost of sanctions against and taxation. unauthorised employment (this issue is examined below), three reasons for preferring clandestine for- 1. The behaviour of labour supply and demand eign workers: differences in pay, differences in social charges, and flexibility in the production process. For the migrant, there can be advantages in clan- destine employment, but illegality is rarely the result For the employer to benefit from lower labour of choice.6 When a regularisation exercise is in costs, undocumented migrants have to accept wages progress, the eagerness of most people who meet the below the current market rate. Taking into account dif- criteria to file an application shows that illegal workers ferentials in pay, standards of living and job opportu- have a marked preference for legal status.7 However, nities in the sending and host countries, both legal the argument that clandestine workers (who are and illegal migrants normally have a lower reserve assumed to be more interested in financial gain than wage. Do clandestine migrants have a lower reserve in working conditions) are prepared to accept longer wage than documented migrants? working hours needs qualification. In an attempt to On the one hand, those embarking on clandes- isolate the sole impact of incentives and constraints tine emigration have to evaluate the expected costs on working hours, Dunn (1960) sought to assess the of their illegality; these mainly comprise the cost of extent to which pay rates match the marginal rate of entering the country (e.g. the likelihood of being substitution between income and leisure. To that end, arrested in the course of each attempted entry, the he compared the results obtained from three samples average number of attempts made before a success- distinguished by the existence and amount of ful entry, brokerage fees) and similarly the expected bonuses linked to long working hours and the fixed cost of being penalised for taking up clandestine costs linked to obtaining employment. It appeared employment. On the other hand, the threat of being that in agriculture, the economic sector that comes caught coupled with the desire, perhaps obligation, closest to the hypothesis of economic theory (i.e. the to pay back rapidly the monies spent on entering the 236 absence of overtime bonuses, low fixed job-obtention country limit the incentive for prolonging job-search

OECD 1999 Clandestine Immigration: Economic and Political Issues efforts. Clandestine immigrants are therefore inclined that demand a rapid response to variations in demand to accept a lower rate of pay than nationals and regular and changing tastes.8 immigrants of the same skill category. These ‘atypical’ jobs are performed by different As far as social charges and non-wage costs are categories of the labour force: young school-leavers and concerned, ceteris paribus, the advantage for employ- students, women looking for a second job, home helps, ers in hiring undocumented workers increases in line and foreigners in a precarious situation (whether with the proportion of labour costs that would other- regular or otherwise in terms of residence status) 9 wise be accounted for by mandatory deductions and are the most commonly employed on such a basis. conformity with health and safety regulations. In this Irregularly employed foreigners constitute one of context, we might talk of a “welfare magnet”, but in a the elements of the hidden economy; they are not quite different sense from how it is normally under- the cause of its existence. However, the existence of stood. Moreover, given the precariousness of his sit- a hidden economy that is broadly tolerated by soci- uation and weak negotiating power, clandestine ety as a whole makes the recruitment of unautho- status also renders him more susceptible to discrim- rised migrants more likely, particularly as networks of inatory practices. migrants make it easier to hire undocumented work- ers in this sector.10 However, though the recourse to clandestine foreign labour can regarded as an ele- 2. Undocumented migrant workers ment of a flexibility strategy, were precariousness to and the hidden economy be extended to other segments of the labour force the relative advantage of hiring clandestine foreign The structure of the labour market and the hid- labour would diminish (Iskander, 1999). den economy constitute for both the employer and the worker the critical element in their decision mak- Clandestine employment is also observed ing processes. It is by no means true to say that the among sole traders (such as door-to-door salesmen hidden economy and clandestine foreign employ- and people who sell goods in underground railway ment cover one and the same domain, but equally stations). In such cases, clandestinity can be both a they are not unrelated given that the hidden econ- necessity and a choice for immigrants.11 It would omy is the only way for foreigners in an illegal situa- appear that these activities are more the conse- tion and with no work permits to enter the labour quence of an exogenous inflow than a response to a market. Clandestine work by foreigners is the point demand for labour in the host country. That said, it at which two domains converge: on one side, irregu- cannot be denied in that the ‘African’ products sold lar migration (which is located within the dynamic of by Senegalese street-sellers in Italy are in fact pro- international migration) and, on the other, the hid- duced locally within the informal sector. den economy (which is linked to changes in the There is an interrelationship between declared labour market, but cannot be simply reduced to the and undeclared employment, that reflects both the work of foreigners in an irregular situation) (Moulier- prohibition/tolerance dialectic of control policy and Boutang, 1991). For clandestine foreign workers, these the complementarily/substitutability debate on the two domains are superimposed upon one another. labour market. Whether it involves legal activities that Work carried out by foreigners in an irregular situation breach tax and employment legislation or illegal activ- is therefore located in the overall dynamic of the ities (e.g. the sale of prohibited goods), the informal labour market, independent of the dynamics of inter- sector develops from the formal sector in the same national migration. The emergence of a hidden way as immigration is a consequence of the existence economy is part of a complex process of labour mar- of a system of legal immigration. The informal sector ket hierarchisation and the bypassing regulations results from institutional rigidities in the formal sector directed at responding to competition through achiev- (e.g. tax regulations and working time rules) and could ing greater flexibility in production and pay. It is also not thrive unless tolerated by society. accompanied by formal “desalarisation” and frequent movement from employee status to non-employee sta- 3. Impact on the labour market. Empirical results tus (from salaried employment to self-employment, for example in the building industry), and the activation of To what extent does the employment of clan- community (i.e. family, ethnic and political) links in destine immigrants affect the employment and employment relations. These strategies for managing wages of nationals and legal immigrants? What dif- work are particularly important in highly seasonal jobs ferences in wages are observed between nationals, 237

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legal migrants and illegal migrants? For otherwise enterprises had a two-tier strategy whereby they identical individuals, are these differences the out- directly recruited irregular workers who were already come of market adjustments or an expression of dis- in the country whilst at the same time, as an insur- criminatory practices? ance mechanism for times when they might find Ten years of scholarly debate on the subject in themselves unable to recruit such labour, they also the United States from the end of the 1970s through to went through legal procedures to hire migrant work- the end of the 1980s have highlighted the problems ers (Tapinos, 1973). one encounters when one attempts to isolate the spe- For migrants, too, it was a short-cut compared cific effect of migrants’ legal status and the difficulties with the legal recruitment system; it enabled them to one meets when attempting to reconcile apparently cut down their waiting time and, in some cases, even contradictory results. One requires, in fact, data which the cost of migration. Illegal immigrants would accept allow one to take into account self selection effects the first job they were offered, and usually at the low- (age, sex, marital status, education, time spent in the est rates of pay. As soon as they were regularised, United States, social capital, etc.), the self selection of they had little difficulty, at a time of substantial those who return and also unobservable events (for industrial growth and labour shortages, in finding example, attitude towards risk). The kind of data that jobs that were sometimes better paid than those of we have at our disposal rarely allow us to exploit the the legal immigrants who continued to accept mini- sophisticated statistical techniques that might elimi- mum wage rates. nate these biases. The research undertaken by Massey (1987) on four Mexican communities observed the The impact of a migrant’s legal status can also be United States and in Mexico is exemplary in this measured indirectly by looking at how migrants’ regard. It shows that the resulting status of inequality wages have changed following their regularisation. does not of itself lead to a lower wage but does exert Figures are generally lacking, and where they exist an indirect influence in the sense that it is associated they come from cross-country surveys that contain with interrupted periods of residence and to shorter biases and are therefore difficult to interpret. An total periods of stay. Experience in the United States exception to this has been the exploitation of two is consequently limited and the workers tend to be American surveys, the Legalised Population Survey confined to badly paid jobs, factors which have the (LPS) and the Current Population Survey (CPS) which effect of diminishing wages, be the persons legal or incorporate a longitudinal follow-up (Tienda & illegal. One of the earliest studies in the United States Singer, 1995). This analysis seeks to break down sal- on the relative impact of illegal and legal immigrants ary variation since regularisation into what can be on the wages of nationals shows that illegal migrants attributed to characteristics at entry that are specific have a smaller negative impact (Bean, Lowell and to illegal workers (e.g. younger, more likely to come Taylor, 1988). The explanation for this outcome may lie from non-English-speaking countries, lower standard in the fact that most legal immigrants enter the country of education, a shorter period of residence in the irrespective of labour market conditions in the United United States), and to factors that may have influ- States, whereas illegal migrants respond more to an enced increases in their wage in the United States endogenous demand for labour in that country. Other (e.g. education, command of English, professional studies concluded that the results obtained should be experience, changes in the labour market, entry subject to some qualification. On the whole, the cohort, the first sector of activity, economic indicators results are not clear-cut, and the impact, if there is one, in the geographical area of activity, and changes in is moderate. the economic situation in the United States). Results point to a substantial rise in the wage of workers fol- In Europe, in the absence of appropriate data lowing regularisation, correlated with the year of the results have been more fragmentory and con- entry and the duration of residence, with major vari- 12 trasted. ations according to country of origin. In addition to the methodological problems already mentioned, these divergences may be 4. The macroeconomic impact, distribution explained by the heterogeneity of the forms of illegal and taxation migration, differing contexts, as well as by the differ- ing dynamics underlying the process of unauthorised What, then, is the total macroeconomic impact migration. In France during the 1960s, for example, specifically attributable to the employment of illegal 238 when regularisation programmes were frequent, foreign labour on distribution and taxation. Accord-

OECD 1999 Clandestine Immigration: Economic and Political Issues ing to standard economic theory, immigration taged workers in society. Insofar as immigration reduces the equilibrium wage, increases total increases the total product, specific groups affected employment (i.e. nationals and immigrant workers) by immigration could receive compensation. The and alters the distribution of income between labour minimum wage and other forms of guaranteed and capital. The greater the fall in wages rates due to income seek to meet this redistributive objective for immigration, the higher is the surplus and return on the most disadvantaged. However, such measures capital investment. Do variations in the amount of can themselves encourage illegal immigration. The surplus and its distribution depend on the legal sta- argument is not that undocumented migrants are tus of the migrant workers? Insofar as the effects of attracted by the “welfare magnet”, but rather that by illegal immigration are linked to a reduction in labour raising the reserve wage of nationals, welfare-state costs and the equilibrium wage rate, illegal immigra- policies increase the return for employers on the use tion, by offering the possibility of labour costs lower of illegal immigrant workers and, to a lesser extent, than would be the case under legal migration, has cet- on the use of legal immigrant workers. eris paribus a more pronounced positive effect on GDP It is precisely considerations of this type that are than legal migration. adduced in support of restrictive policies. However, However, it is also important to take account of restrictions on legal and illegal immigration that aim the characteristics of migrants, their skills, the sectors to protect the least skilled groups on the labour mar- and branches in which they are employed, the condi- ket have to be compared in an open economy with tions of supply and demand for nationals, and the effects on the same groups that would result from an time horizon in question. For example, Djajic pre- equivalent increase in labour-intensive imports. sents an open economy model with full employment Potential migrants unable to leave their countries in two sectors: unskilled workers, both nationals and would specialise in the production and export of unauthorised migrants, are employed in branches labour-intensive products; the employment and whose product is an input for branches where only earnings of unskilled workers in what would other- nationals are employed. The effects on wages and wise have been immigration countries would thereby flexibility in a sector brought about by the employ- be affected. ment of undocumented workers increase the total The fear of a crowding-out effect on nationals product and per capita product for the workforce as a and legal migrants is reinforced when illegal immi- whole. In the long term, the employment of illegal gration occurs during situations of rising unemploy- foreign workers may promote the acquisition of skills ment. According to a neo-classical approach, an and the upward mobility of the domestic labour increase in unemployment would be analysed as a force, and thereby raise incomes for society as a further voluntary withdrawal by nationals and legal whole (Djajic, 1997). However, results are linked to immigrants from the labour market, their reserve migrants’ skill levels and to their exclusive concen- wages being higher than the now lower equilibrium tration in a branch or sector, rather than to their ille- wage brought about by the employment of illegal for- gal status. A structure of this type provides an eign workers. Though what exactly voluntary unem- equally good description of both legal and illegal ployment and reserve wage mean in such a model is, migration in Europe during the 1960s and early 1970s to say the least, somewhat ambiguous, particularly in (Lutz, 1963; Tapinos, 1973). an open economy with the possibility of temporary By contrast, given the current situation in Europe, labour migration. particularly in southern Europe where the labour Let us imagine a large inflow of undocumented supply and unemployment are both high, substantial foreigners ready to accept jobs at a wage 50% below non-wage labour costs in the formal sector and the the market rate – a movement that could lead to a shortage of capital can lead to a displacement of capi- massive withdrawal of nationals from the labour mar- tal and workers towards the low-cost informal sector. ket. To consider these nationals as voluntarily unem- This is an undesirable consequence in the long ployed because their reserve wage is too high would term (Dell’Aringa and Neri, 1989). It is a hypothesis be to render the notion of a reserve wage meaning- that needs checking; the detailed sectoral analy- less. The reserve wage is established in relation to ses required for this have yet to be carried out certain expectations that workers have with regard to (cf. Venturini, 1997). their standard of living – taking into account time and The most sensitive area concerns the effects of place, to use the academic definition of the right undocumented migration on the most disadvan- price. Migrants are prepared to accept wages which, 239

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given the constraint of an irreducible level consump- the determining factor behind their decision to tion in the country where the jobs are, provide a stan- migrate should be treated with caution. There is, dard of living desired for family members who stayed however, an argument in favour of reallocating behind through remittances that increase in value resources between the various administrative tiers in with improvements in the terms of trade. The reserve order to pay for higher charges at the local level. wages of residents of immigration countries and of The research by McCarthy and Vernez (1997) potential migrants are associated with different refer- that reports on the results of surveys conducted by ence spaces and life styles. Differentials may explain the Rand Corporation in California can be cited as an why people resort to unauthorised immigration, but example. According to United States law, illegal they also pose the problem of an inter-personal com- immigrants are not eligible for certain assistance pro- parison of utilities. grammes, although they do qualify for education and The question of labour market competition for food programmes. Children qualify for assistance needs to be examined together with concerns for the in the same way as all children born in the United fiscal impact of illegal immigration. This brings us States. In fact, the drawing of social benefits depends back to an examination of the extent to which deduc- more on migrants’ socio-economic status rather than tions and benefits are linked to territoriality, nation- on their legal status. However, it is noteworthy that: ality and regularity in respect of residence. a) hospitalisation is higher among children born in In terms of taxation, whatever calculation tech- the United States of illegal immigrants; b) many ille- nique is used to itemise the expenditures and gal immigrants qualify for access to certain social pro- resources put into immigration as a whole (it is a cal- grammes (e.g. AFDC, food stamps and Medicaid) culation that cannot be simply reduced to a cross- insofar as their children born in the United States are sectional analysis, and has aroused a debate notable eligible or one of the parents has the status of legal for its extremely divergent positions), the fiscal immigrant; and, c) illegal immigrants tend not to impact of unauthorised foreign workers and their apply for reduced tax liability. families is generally positive as far as the national The final element to be considered in this calcu- budget is concerned: illegal migrants pay indirect lation is the cost of control, which can indeed be very taxes in the same way as all other consumers and high. Entry control seeks to counter a wide range of although they avoid paying income tax their reve- illegal activities including drug trafficking and terror- nues are generally such that the loss to the public ism. Not all the costs incurred in entry control can be exchequer cannot be significant and is unlikely to attributed to illegal migration. Moreover, the specific exceed what they obtain in return, given that their cost of applying laws (e.g. frontier controls, the impo- use of community services tends to be even lower sition of penalties on employers, and the investiga- than their incomes. The only real “cost” linked to tion and sending back of foreigners lacking the irregularity is for services the use of which is not proper documents) are an integral part of general determined by the legality of residence status; these immigration policy and as such is the price to be paid mainly concern the education of children of illegal for operating a legal migration regime – unless, that immigrants. is, we were to imagine a totally open-frontier system. As far as social protection is concerned, contri- In other words, for illegal immigration to represent a butions and entitlements are linked to regularity in fiscal burden, it would have to be assumed that the respect of residence and work. On the hypothesis cost of control (properly adjusted) exceeded the that regular migrants realise a net gain from the social positive net balance of fiscal revenues less social protection system, a relative increase in the propor- expenditures attributable to it. That is a highly tion of illegal immigrants in the immigrant popula- unlikely outcome given the extent of illegal immigra- tion who do not contribute – but do not draw benefits tion’s positive impact on GDP. either – actually reduces the cost of the system. On In conclusion, in order for the phenomenon of the hypothesis that the contributions of regular clandestine immigration to be comprehended it is migrants are greater than the benefits they receive, essential that its economic dimension be taken into which is usually the case, a similar relative increase in account. It would appear however that economic the proportion of illegal immigrants represents a loss analyses of the labour market have not identified to the system. Whichever of these hypotheses is and incorporated within its models the specific fea- retained, the claim that the money that illegal tures of clandestine immigration. This explains why 240 migrants take out of the social protection system is the majority of the studies of illegal immigration, in

OECD 1999 Clandestine Immigration: Economic and Political Issues particular to the Unites States, analyse the employ- of foreign labour aims to limit clandestine inflows ment of illegal immigrants as if it were coterminous and residence; the main justification for the control with that of unskilled legal immigrants. The differ- of flows is to protect the domestic workforce from ence in the economic incidence of illegal and legal unfair competition thought to come from the clan- immigration appear then as a matter of degree rather destine employment of foreign labour. To these two than of nature administrative activities, we must add free trade and co-operation policies that seek to reduce the pro- C. COMBATING CLANDESTINE IMMIGRATION pensity to emigrate. Before turning to an examination of the administra- tive effectiveness of controls, the questions of the legit- 1. Frontier control and controlling the length of stay imacy of restrictions on movement and settlement and To measure the effectiveness of administrative their economic efficiency, from both the world and measures requires that the policy’s objective has national point of view, naturally pose themselves. been clearly defined. If the objective is to reduce With regard to economic efficiency, as defined illegal immigration and settlement in the country, are by some criterion of world or national welfare, there the entry restrictions efficient, do they represent the are arguments in favour of both an open frontier and best option? To answer this question, we need to a control policy. Using very restrictive hypotheses, take account not only of the direct effects on inflows, particularly an otherwise fixed national supply of but also of the effects on net migration. However, labour, it is possible to demonstrate that total world entry control is only one of the possible ways of lim- welfare would increase were all frontiers opened up iting inflows and settlement in the country. It follows, (Hamilton and Whalley, 1984). At a national level, one therefore, in relation to the established objective, may more realistically say that, for the recipient that we need to compare the cost-effectiveness of country, immigration has distributive and “free rider” frontier controls with other indirect methods, for effects in that it allows new entrants to benefit from example the imposition of penalties on the employ- the past accumulation of capital and technological ers of clandestine foreign workers or policies of co- progress, the cost of which has been borne by previ- operation with origin countries. ous generations. However, looking over the long term, there are too many non-measurable parame- The policy of controlling inflows responds to gen- ters. That is why immigration policies are usually eral principles of immigration policy regarding the founded on short-term economic arguments, or on number and characteristics of legal migrants. In set- arguments of political philosophy that have nothing tlement countries, in particular the United States, to do with the issue of economic impact. this involves defining immigration criteria and mea- sures for combating clandestine immigration; in the In this regard, two observations can be made. European Union, it takes the form of severely First, in a democratic society, whilst the regulation of restricting labour immigration from non-member inflows and the definition and implementation of countries. Whether they limit access to the country rules for accepting new members of the community through a policy of visas or prevent the clandestine are seen as forming part of the legitimate attributes crossing of frontiers, these policies of controlling of a nation-state, the issue of sending immigrants migration flows have revealed their effectiveness but back against their will is much more problematic. also their limitations. Although they have reduced There is an asymmetry here which, for the individual, the number of entries of the categories concerned, recalls the asymmetry between the right to leave they have also led to their substitution, to some one’s country and the absence of an equivalent right degree, by those categories whose entry continues to to enter another. Liberal societies have also made a be possible and/or less controlled, and who have commitment not to close their frontiers to refugees subsequently transformed themselves into clandes- and asylum seekers. What, then, in these conditions, tine residents. Clearly, policies for controlling inflows are the options for the State? cannot on their own hope to regulate immigration. The combating of clandestine immigration is The international opening of economies, the volume effected by measures that attempt to control inflows of cross-border movements, the maintenance and length of stay, and curb the clandestine employ- (indeed the heightening) of economic imbalances ment of foreign labour. These two elements are between rich and poor countries, and the existence closely linked: curbing the clandestine employment of networks sustained by the presence of estab- 241

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lished foreign communities ensure that control is not In Europe, after frontiers were closed the admission simply a matter of visas and frontier police. of asylum seekers was for a time and without calling In the context of globalisation, entry control pre- the principle of closure into question an indirect and sents a real problem for developed countries. First, more efficient means of selecting entries. outside a closed system (such as that of the Soviet Control over entry in no way guarantees control Bloc or the Berlin Wall), and in a democratic environ- over the length of stay. The strengthening of external ment, a selective, partial system of control is difficult controls, however effective they may be as far as to implement. Moreover, it is generally the case that inflows are concerned, does have an impact on the countries that attract migrants are often those that rate of migration return, on length of stay and, there- also attract entrants of all kinds, mainly tourists and fore, on the stock of illegal immigrants in these coun- family visitors. The problem is how to distinguish tries. In the United States, where the risk of being clearly at the point of entry between potential apprehended at the frontier has increased over migrants and other flows. No administrative measure recent years, migrants have tried to compensate for [e.g. visa policies that distinguish between different the additional cost by crossing the border less often categories of inflow, the insistence on special condi- and spending more time in the United States. In tions for tourists such as the obligation to have a Europe, the closing down of frontiers has had the return ticket and/or a certain amount of money, and effect of slowing down the rate at which labour the recently withdrawn French system of an “accom- migrants return home (with marked differences by modation certificate” (certificat d’hébergement)] has nationality), consolidating the family reunion pro- proved itself sufficient to meet the problem.13 cess, and extending the length of stay. In this context, the United States’ migration Democratic and liberal states face a range of policy, which focuses mainly on entry (i.e. the visa political, legal and administrative difficulties. Sending system)14 and the surveillance of land frontiers, back long-standing foreign residents, particularly if provides a particularly good illustration. How effec- they are in employment is, irrespective of their legal tive is the threat of being apprehended by the Immi- status, open to question. Among developed coun- gration and Naturalization Service (INS)? Research tries, no recipient country has introduced plans for a by Espenshade (1995) does not offer a firm mass-scale repatriation. Public opinion is in favour of response.15 There is a 30% chance of being appre- restrictive measures at entry but is much more reluc- hended each time an attempt is made to enter the tant to accept coercive repatriation measures. There United States, but of course migrants can simply are also legal and technical difficulties that hinder the keep trying until they succeed. There is a 1-2% implementation of forced departure measures. The chance of being apprehended on American soil. It is law requires compliance with strict conditions for clear that, when migrants reach the American border, repatriation or expulsion: these take the form of indi- they will cross it eventually, and once they are inside vidual legal or administrative decisions, notifying the the country, there is very little likelihood of their foreigner of the decision personally, and the possibil- being arrested. It appears, then, that there is no link ity of verifying the individual’s identity and citizen- between the perceived risk of being arrested at the ship. There is no shortage of examples of people border and the total number of illegal immigrants in against whom decisions have been taken, but which the United States. However, Espenshade concludes have proved impossible to carry out: these include that implementation of INS policies “does have individuals who have had their identity papers taken some dissuasive effect”. Over recent years, although away from them and cannot be expelled or escorted to the strengthening of INS controls has increased the the border, and cases where, despite strong evidence risk of apprehension it has also been accompanied of a person’s nationality, it has been necessary, in the by an enlargement in the number of crossing points. absence of formal proof, to obtain acknowledgement Assessing the administrative effectiveness of of citizenship from the consulate in the country of ori- control policy by its impact on flow reduction can be gin, the latter’s co-operation in such matters being deceptive as soon as there exists ambiguity in the linked to considerations outside the field of migration. policy’s objective. In North America and Europe, the Readmission agreements are specifically aimed at stepping up of controls does not rule out a degree of dealing with this type of problem. acceptance of irregular entries. In the United States, at The asylum applications system is a typical illustra- least until 1994, the declared control policy at the tion of the limitations affecting the control of inflows 242 Mexican border was exercised somewhat selectively.16 and length of stay. The asylum system seeks to guar-

OECD 1999 Clandestine Immigration: Economic and Political Issues antee legal protection for asylum seekers in situations the asylum route will continue to be a one of the key where they are few in number and where there exists components of migration flows. The asylum proce- an indisputable means of assessing personal risk in dure, which is specific with regard to entry, illustrates the country of origin. In the late 1980s and early 1990s, the general difficulty of controlling the length of stay. the use of the asylum procedure by candidates for It appears therefore that there is an inter-relation- migration, when all other means were out of the ques- ship between entry control and the regulation of migra- tion or more difficult, has been reflected in a substan- tion return. A country which makes entry more difficult tial growth in the number of asylum seekers in western thereby reduces the incentive to leave for those Europe, particularly Germany – to the point of already present. However, when confronted with the severely hampering the functioning of the system. difficulty of exerting control over length of stay, coun- This crisis has led to reform of national legislation. tries react by raising barriers to entry, often going fur- Let us take the case of someone entering a coun- ther than the degree of closure that was initially try and applying for asylum. He files an application planned and seen by the country as desirable. Immi- but, because of the large number of requests out- gration control can only be carried out at entry, but the standing, the processing can take months, sometimes economic, social and political problems of immigration longer than two years. In most cases, the request is are more the result of the settlement of migrants. rejected in the first instance and the application goes As soon as unauthorised migration is, in the through to appeal, a procedure designed to ensure so absence of reliable data, assumed to reach propor- far as possible that no legitimate request for refugee tions deemed “large”, governments face a dilemma: status is turned down. The appeal procedure is sus- either they apply the existing legislation and thereby pensive; the person can therefore stay in the country create a group of marginalised individuals, or they for the duration of the procedure. During this time, the decide on an amnesty which has to be presented and country has to decide between the following alterna- perceived as an exceptional and “one-off” operation. tives: either the asylum seeker obtains a work permit, In the latter instance efforts are made in the hope of which means that if the appeal is rejected (which is ensuring that the amnesty does not attract new what usually happens), the asylum seeker is to all inflows,18 and in particular that it does not stimulate intents and purposes settled and the implementation expectations of another amnesty. of the judicial decision (which should involve sending him to a foreign country) turns out to be technically The European experience, particularly since and humanely out of the question; or the country does 1973-74, and the American experience (IRCA, 1986) not grant the asylum seeker a work permit, and this show that no regularisation exercise has ever put an involves giving him financial assistance and enabling end to the presence of clandestine immigrants, in him to qualify for social security benefits while he the sense that none have affected the decisive fac- awaits the final decision. In the latter case, the charge tors and mechanisms underlying illegal migration. increases over time and becomes increasingly difficult This does not mean that regularisation programmes to justify, especially so given that some asylum seek- should be ruled out, rather that it is important to rea- ers manage to find jobs in the hidden economy.17 lise that amnesties (partly) efface the past, but have no effect on the future. However, the American exam- Countries faced with this dilemma have initially ple shows that, even in the absence of any prospect chosen to speed up the process by increasing the of a new amnesty, illegal migration has once again budgets of the government departments responsi- increased; this makes it quite clear that there does ble for refugees. This has been effective. However, it not need to be the prospect of a new amnesty for the ultimately proved necessary to make the asylum stock of clandestine immigrants to increase. Recent scheme more restrictive: in Germany, this resulted in experience in Europe shows that it is not an option to an amendment to Article 16 of the Basic Law; in decide whether to have an amnesty or not; rather, the Europe more generally, it took the form of imple- choice is between repeated amnesties and discreet menting the Dublin Convention whereby candidates amnesties carried out on a case-by-case basis. may make only one application in the European Union. These measures have led to a significant 2. Employment controls and penalties against reduction in the number of asylum seekers. Yet, employers greater financial resources and stronger controls have only a limited effect on the principle of the asy- The imposition of penalties against employers lum system; there is therefore reason to believe that who use clandestine labour, that is to say the second 243

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form of control, aims to influence the determining assessed on the basis of such factors as the amount of factors of unauthorised migration but, like regularisa- money invested by the competent government tion, it is a means after the fact of dealing with the department (the INS, for example), the degree of geo- problem. graphical and sectoral concentration of illegal workers, and the size and location of the company. This eco- In the light of the most recent European and nomic analysis needs qualification in the case of Euro- American experiences, sanctions against employers pean countries. The vision of the market economy would appear to be of very limited effectiveness. ignores the shame that can go with being found guilty There are a number of reasons for this. First, there are of employing illegal workers. Clandestine workers can intrinsic difficulties in implementing such a system; be hired by small enterprises in the formal and infor- some are legal or technical, while others are linked to mal sectors, but not by large firms. These latter pos- the socio-cultural environment. In most cases, employ- sess, however, the political influence to recruit the ers are not asked (or, more accurately, they cannot be migrants they need through other, more widely asked) to check the validity of documents produced accepted, means. It follows that the perceived concen- by migrant workers. As a result, even if the employer tration of illegal workers in certain jobs, and in firms is under a duty to check on a worker’s status, he can marked by certain characteristics, can be deceptive. only be punished for not ensuring that the docu- ments were valid. More importantly, the system of There remains the question of the discrimina- sanctions can only be effective if it is perceived by tory effect that employer sanctions have on legal society, particularly at local level, as a legitimate ele- migrant workers. An honest employer who does not ment of labour market intervention. seek to hire illegal migrants might refuse to hire workers who display characteristics that point to a In reality, there is usually quite a gap between high probability of their being clandestine (e.g. a low being found breaking the law and being found guilty level of skills, or a poor command of the language). in a court of law. It is hardly surprising, therefore, that Paradoxically, law-abiding employers who have no the legal process comes to a halt somewhere intention of discriminating are more likely to operate between the two as a result of local considerations on this basis thereby actually discriminating against and political pressures that highlight the difficulties legal workers. However, this legitimate concern must that enterprises would face if they had to pay for not be used as an excuse for relaxing a system of labour at the current market rate and the risks that a sanctions that aims to prevent unfair competition cessation of activities would have on the employ- among unskilled workers (North, 1994). In any case, ment of nationals. that administrative effectiveness is limited does not Sanctions against employers also have an eco- justify the conclusion that there should be no con- nomic dimension. The effectiveness of the system of trols at all. After all, that the police will never succeed sanctions depends on the extent to which a sanction in completely stamping out criminality would not jus- reduces the demand for unauthorised workers by tify disbanding their force. adding a risk premium to their wage. This effective- The significance and scope of these measures ness also depends on the extent to which sanctions also depend on the context in which they operate encourage the replacement of clandestine immi- and on the importance attached to the socio- grants by nationals or legal immigrants thereby economic and legal dimensions of the offence. In reducing clandestine entries. There is a price that European countries such as France, the combating of entrepreneurs are prepared to pay to be able to hire the employment of foreigners in an irregular situa- unauthorised workers; the problem may be formu- tion forms part of the wider campaign against clan- lated within the theory of optimal taxation (Hill and destine employment. It aims above all to secure Pearce, 1990). Entrepreneurs will risk employing compliance with employment legislation with a view unauthorised foreigners for as long as the expected to preventing the unfair competition that would cost of being penalised (a function of the expected result from hiring clandestine labour. The penalties size of the penalty and the likelihood of being are directed at employers, not at workers. To this caught) is lower than the difference between the end, drawing upon the lessons learned from applying labour costs of illegal and legal migrants. the law, in particular the variety of legal devices used The unknown element for the employer is the with the aim of evading employment and taxation likelihood of being checked up on. It can however be regulations, attempts have been made to strengthen 244 calculated, or at least its determinants can be and reposition control provisions (i.e. focus on pre-

OECD 1999 Clandestine Immigration: Economic and Political Issues vention), the justification for which goes beyond answers to two lines of inquiry: What effect can the administrative and economic efficiency. The ques- liberalisation of national economies and trade tion of the efficiency of sanctions, notably with regard liberalisation be expected to have on growth in to how much they reduce clandestine immigration revenues and employment? and, What effect can and what impact they have at the macroeconomic stronger economic growth in origin countries be level, has been accorded rather less attention. expected to have on the incentive to emigrate (Tapinos, 1999)? The perspective in the United States is different. The imposition of penalties on employers seeks to The impact of external opening on the growth of reduce clandestine entry and residence; it is not first economies is highly debatable. The analysis mainly and foremost a legal instrument of regulating the (and often solely) focuses on the impact on exports labour market. Here, as a result of experience and imports and on growth in the economy; it is more acquired since 1986, less effort has been made to discreet about the effects on employment and alter labour market regulation in response to the income distribution.19 inventiveness of clandestine workers and their The relationship between economic growth and employers. Instead, questions have been asked emigration is even more uncertain. Economic theory about the relative efficiency of implementing laws and empirical observation suggest two possible against employers as compared with measures approaches. If the explanation for migration is mainly aimed directly at curbing clandestine inflows at fron- to be found in income differentials (this is the only tiers. Taken to their logical conclusion, were it to be scenario produced by the theory of international shown that, by comparison with legal immigration, trade that assumes full use of factors of production) illegal immigration is of greater benefit to the econ- and employment (the neo-classical theory of alloca- omy then such considerations of economic efficiency tion of factors), and if the opening up to trade and would lead to the conclusion that implementing laws movements of capital is likely to encourage growth in against employers has a negative economic impact. the revenues and well-being of all trading partners This means that sanctions are efficient only if and stronger growth among the less developed coun- they reflect society’s view of the legitimacy and tries, it is possible to predict that the surplus work- necessity of combating clandestine employment and force will be absorbed and that there will be form part of a more general policy directed to this convergence in wages. end. Real control is social control, as the Swiss exam- A reduction in the incentive to emigrate follows ple testifies. It necessitates at the local level a con- from this; free trade and development aid are then sensus on the need to combat the phenomenon and an alternative to population movements. On the implement sanctions against employers. The new other hand, if it is true that the origin of migration lies strategic orientation adopted by the INS, which pro- in the breakdown of the demographic-economic poses to associate local communities and the imple- equilibrium, which results notably from the take-off menting agencies in its actions in order to “identify of the development process, then an increase in and define the problems linked to illegal immigra- internal mobility, which is inherent to this process, tion” is in line with such an view (INS, March 1999). normally extends outside the confines of the country. According to this hypothesis, development and 3. Policies designed to reduce the propensity international migration go hand in hand (Tapinos, to emigrate 1974; Diaz Briquets and Weintraub, 1991, Massey, 1988). This hypothesis finds confirmation in empiri- In a world where demographic and economic cal studies of the American and European cases. The imbalances produce a supply of emigrants out of all two viewpoints may be reconciled through the intro- proportion to the reception capacities and demand in duction of a time dimension. In the medium term, the developed countries, it has become necessary to re-sit- kind of development fostered by trade liberalisation uate migration in the context of development, and to strengthens the incentive to emigrate; in the long promote a strategy of trade liberalisation, incentives for term, improved standards of living make emigration private investment, aid and co-operation, from which less advantageous for potential candidates. one might eventually hope to see a reduction in inequalities between nations and less incentive to The decrease in clandestine migration is envis- emigrate. The realism of this approach, and the aged in this way as the consequence of a fall in the confidence we can have in it, depend on the general propensity to emigrate. However, the selec- 245

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tive character of migration needs to be taken into migration is a process with inflows and outflows. It is account. If those who are disposed to migrate clandes- the obstacles to entry which have the effect of ulti- tinely are different from other potential migrants, mately inducing an increase in the number of illegal whether these characteristics be observable or other- immigrants greater than would be the case under a wise, then the question of the specific impact of devel- more liberal system of entering and leaving. opment and trade liberalisation will remain open. A The problem of the control of migration flows partial indication in this context was provided by should not be viewed as being uniquely bilateral. The Hanson and Spilimbergo (1996), who showed that emergence of new geographic areas for migration illegal migration as measured by apprehensions is a imposes on governments forms of co-operation rang- function of wage differentials between Mexico and the ing from the exchange of experiences through to co- United States, but that it is more responsive to varia- ordination in the methods they employ to regulate tions in real wages in Mexico than to variations in real migration flows.20 Yet in a world increasingly open to wages in America. Generalisation on the basis of this the circulation of goods and capital, where the reduc- observation would not, of course, be warranted. tion in transport costs leads to considerable cross- border movements linked to tourism, to the acquisi- tion of tertiary education and professional training and Conclusion to business travel it is anachronistic to conceive of immigration control exclusively in terms of sovereignty. What lessons can we draw from this examination of the economic and political issues of international A distinction needs to be made between move- migration in the light of experiences in North America ment, the expression of the human right to come and and Europe? What is the scope for public interven- go, and settlement which is conditional on the legitimate tion in the context of accelerating globalisation prerogative of societies to decide the extent to and alongside the persistence of demographic and eco- the conditions under which they are ready to accept nomic disequilibria between the rich and poor coun- new members. For all that, the difficulty of managing tries and the instability resulting from intra- and the risk that incomers will remain beyond the duration inter-national conflicts? of their visa cannot legitimise the imposition of restric- tions on the circulation of persons for this would be The phenomenon of clandestine migration is not detrimental to the majority of them who desire merely confined to any one migration regime in particular. and with honest intent to undertake a brief stay. Neither a regime open to regular migration such as that in North America nor one of closed borders such It should be noted also that migrants belong nei- as that prevailing in Europe guarantees the contain- ther to their country of origin nor to their country of ment of clandestine entries and the prevention of destination. It is an illusion to imagine that irregular unauthorised residence by foreigners in an irregular migration can be eliminated solely by state interven- situation. The diversity of the potential forms of clan- tion and improved co-operation between the origin destinity, the multiplicity of the objectives in the fight and destination countries. Clandestine migration, as against clandestine immigration, the conflicts of inter- well as being a breach of the law is also a manifesta- est between different groups in recipient countries tion of individual liberty. Between the inspector who and the ambivalence of public opinion necessitate the carries out his duty and the migrant in search of his implementation of a range of measures. The effective- destiny, the issues are not of the same nature. This is ness of these measures rests on the assumption that the root of the problem.

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NOTES

1. The OECD and the Dutch authorities with the support administrative statistics, çross-sectional by nature, of the United States organised a seminar on prevent- record the events or migrants affected by the events ing and combating the employment of foreigners in an without, in general, it being possible to attach the irregular situation. The seminar took place in The events to a reference population. Further, there is dis- Hague on 22-23 April 1999. The seminar was a continu- tinction to be drawn as to the reliability of the informa- ation of the work carried out since 1995 by the OECD tion: between administrative records which can Secretariat under the auspices of the Working Party on include a fiscal dimension or an element of sanction Migration. This work has facilitated the study of illegal which might incite inexact declarations, and data which immigration in several OECD Member countries in respond to a desire for socio-economic knowledge relation to labour market and other programmes to such as censuses and some surveys; they do not nec- regularise foreigners in an irregular situation. The sem- essarily have the same utility when one seeks to deter- inar comprised three sessions. The first session analy- mine the number of clandestine immigrants. When sed the impact of irregular migration on the economy clandestine immigration is tolerated, it is quite possi- and the labour market. The second session was dedi- ble that a census will record a non-negligible propor- cated to the comparative analysis and the evaluation tion of the clandestine immigrants. of measures undertaken to prevent and combat the 4. It is a gross over-simplification, but we can identify employment of foreigners in an irregular situation. The three overlapping types of procedure. Firstly, there are third session was composed of two round tables. Par- surveys that have the advantage of including charac- ticipants in the first round table included OECD policy teristics of economic sectors and the workers con- makers, representatives of governmental administra- cerned, but do not identify variations over time. Then, tions in charge of the implementation of sanctions there are numerical methods that focus on anomalies against labour traffickers, dishonest employers and between observed and assumed developments; the foreigners in an irregular situation. Representatives of variables customarily used are participation rates, the Trade Unions also contributed to the discussions on disparity between national revenue and expenditures, the difficulties encountered in implementing sanc- the proportions of expenditure using cash and large- tions at national levels and proposals for actions to denomination notes, and household electricity con- overcome these difficulties. The second round table sumption. These methods need a departure point at was devoted to the extension and improvement of which time it is reasonable to assume that the hidden international co-operation directed at effectively pre- economy is, to all intents and purposes, non-existent. venting and combating the employment of foreigners It is then possible to identify growth in the hidden in an irregular situation. The proceedings of the semi- economy over time. A more ambitious econometric nar as well as the conclusions and recommendations of procedure uses a theoretical model of the informal the OECD Secretariat will be published by the OECD economy that involves the introduction of a series of in January 2000. The document presented at the semi- variables defining determiners (e.g. fiscal pressure or nar by Georges Tapinos (Irregular migration: economic regulations covering employment) and indicators of and political issues) has been chosen for the Special the hidden economy (e.g. participation rates). Because Chapter of this edition of the annual report "Trends in of the wide variety of procedures used and specific International Migration". features of the statistical factors requested and the 2. The relative proportion of these two components in field covered, it is difficult to make comparisons. As a the number of illegal migrants varies from country to percentage of GDP, estimates range between 2% and country. In the United States, it has been estimated 4%, with particularly high levels for certain sectors such that illegal entries (entries without inspection) and as building, hotels and catering, domestic services and overstayers each account for 50% of total illegal immi- agriculture. gration (Warren, 1994). A more recent estimate by the 5. Despite the multiplicity of conceivable procedures, for INS puts the figures at 60% and 40% respectively. most of the countries concerned we do not have a sin- 3. One can not always distinguish these different catego- gle estimate worthy of the name. For the European ries in the administrative statistics. Indeed, these countries, one is obliged to content oneself with very record either legal movements or infractions which, partial measurements, typically estimates inferred when they are penalised, measure clandestinity at the from the number of asylum or regularisation applica- very moment that it has ceased to exist. Moreover, tions refused. In the United States, however, the civil 247

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service furnishes one of the most reliable estimates of sectors, in particular that the depressive effect is more the stock of clandestine immigrants. The number in pronounced in agriculture, but that the overall impact October 1996 was put at 5 million, there having taken is small. However, in another context, other studies place between 1992 and 1996 an annual growth of show that the pay of undocumented workers is lower 275 000 (US Statistical Abstract 1996 and GAO, than that of nationals (allowing for different levels of April 1999). productivity), and that they perform lowly regarded jobs with few differences in pay determined by quali- 6. This can vary for nationals and established regular fications, gender or age (Lianos, Sarris and Katseli, migrants. Although there is certainly more of an incen- 1996; Markova and Sarris, 1997). tive for nationals to work in the informal economy than for undocumented foreigners, the advantages for the 13. However, as statistics on flows into European countries former outweigh the risk; this is not so for illegal work- show, it would be wrong to under-estimate the impact ers. Contini (1982) cites the example of Fiat whose staff of the visa policy. between the mid-1960s and the early 1970s left for employment with smaller enterprises where there was 14. Under American law, obtaining a visa from an American more work and higher capitalisation and profits. Regu- consulate abroad does not remove the right of immi- lar migrants, too, have accepted restrictions that lim- gration officers to refuse entry at the point of entry. ited their mobility. 15. n 1993, the INS spent $US 362m on implementing the 7. However, it should be pointed out that there are cases policy; to this sum, we must add the $US 12.2m spent where undocumented migrant workers have lost their on equipment used in achieving the same objective. jobs following regularisation; they are less likely to That year, 1 282 000 apprehensions were carried out by repeat the experience another time. border patrols; another 45,000 were made inside the United States. In 1998, the INS spent around $US 900m 8. The decision to sub-contract part of production rein- for the Budget Authority for Border Patrol (cf. Tight- forces, and often conditions, the opportunity to reduce ened Controls and Changing Flows: Evaluation the INS wages and avoid mandatory deductions (i.e. taxes and Border Enforcement Strategy by R. Suro in Research social security). Perspectives on Migration, Vol. 2, n°1, 1999). 9. Sub-contracting, a practice that responds to a logic of 16. This has been well documented by the Zapata Canyon efficiency, also allows artificially created companies Project (Bustamante, 1990). Illustrations of this include to expand by employing unauthorised labour. For the fact that most migrants do not choose to cross the example, a French legal judgement refers to a sub- frontier where the geographical conditions are least contractor who employed eight people, five of whom dangerous, but where there is a large labour market on had no residence permits or work permits, and one of the American side (e.g. the Tijuana-San Diego border), whom had no work permit. Work was supervised by a and the large number of 'illegal commuters'. charge-hand from the main company, the workers were lodged in huts hired by the same company, and all the 17. It is interesting to note that countries choosing the former equipment and materials used for production were also option (e.g. France) have subsequently gone for the latter, the property of the main company. Sub-contracting and countries choosing the latter (e.g. Germany) have enabled the main company to avoid paying taxes and subsequently adopted the former. social charges (Pupier, 1992). 18. This assumes that provision is made for deadlines, 10. Unauthorised migrants often have a better under- proof that the applicant is indeed residing in the coun- standing of conditions in the informal labour market try, and possibly further proof that he has a job. than nationals and immigrants who have been in the country for a long time, particularly in the services sec- 19. Given the wide range of experiences, it is particularly tor. This gives them a comparative advantage. interesting to identify the factors likely to influence the direction of variations and to measure their effects. In a 11. For example, some Sri Lankans who had no real inten- review of the literature, Edwards (1993) selects five ele- tion of settling, applied for asylum in order to take ments: liberalisation measures, in particular the distinc- advantage of the slow pace at which the application tion between, on the one hand, the removal of quota process is conducted, and used the time to build up and tariff barriers and, on the other, devaluation that can their savings before returning home (Costes, 1991). become necessary as a result of the opening; the time- tabling and speed of the opening; the stage of develop- 12. We have indeed very little research material of the sta- ment that the country has reached; the international tistical quality necessary to make an assessment. One environment; and labour market distortions. of the monographs worthy of note, that by Venturini (1997) measured the elasticity of regular employment 20. Hence the lifting of internal controls within the compared with unauthorised, irregular employment European Union and the drafting of common regula- and threw doubt on the hypothesis that there is com- tions for external border control (the Schengen inter- petition from irregular foreign labour. Using ISTAT data governmental agreement and the Dublin Convention on the hidden economy during the period 1980-1994, on asylum seekers). For all this, none of the countries she showed in 14 branches in 5 sectors (agriculture, concerned has ruled out the possibility of applying industry, construction, tradable services and non- special conditions to certain categories of would-be 248 tradable services) that there are variations between entrants.

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