Abstract
We consider two types of illegal migrants to a developed country based on the expected lifetime income: low-risk entrance with high risk of detection during their stay (type A) and high-risk entrance with low risk of detection (type B). Following Japan’s new immigration policy introduced in 2019, we also consider two types of legal unskilled immigrants: those with a limited staying period without their families (Specific Skills #1) and those permitted permanent stay with their families (Specific Skills #2). Resulting from each individual’s choice, if all four types of immigrants exist, paradoxically, we found that policies encouraging the introduction of type B illegal immigrants would be the optimal policy for the host country that seeks to improve both foreign workers’ quality and the economic welfare of domestic residents.
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