International immigration via different two-type midstream countries

Employing the basic model of illegal migration by Bond and Chen (1987) and Yoshida (1993), we theoretically studied recent trends of illegal immigrants in Europe. Initially, immigrants from the Mideast or North Africa cross the border of marginal countries (e.g., medium developed country like Greece or developed country like Italy), which are part of a large economic bloc (i.e., the European Union and the Schengen agreement), with the intention of moving within the bloc to find good job opportunities in highly developed countries (e.g., Germany); this is facilitated by a lack of passport controls among member countries. Particularly, we focus on the optimal policies of a highly developed country as the final destination of immigrants from two different routes (i.e., via one developed country with ordinary border control, or via another medium developed transit country without any motivation of restriction). At the begining, available policy for this final destination highly developed country is only internal enforcement, that is, detecting illegal immigrants during employment. Cooperation with a border developed country, including encouragement to enhance the level of restriction, is just a possible policy for the final destination country. However, we find that it is not sustainable, and sooner or later this policy causes negative effects on the economies of those two cooperating developed countries. On the other hand, introduction of the border control policy between the border medium developed country without any restrictions and, maintaining revenue neutrality, reducing the level of internal enforcement, will be welfare improving for the final destination highly developed country under certain reasonable conditions.