Economic consequences of building a cross-country barrier among alternative policies to deal with unauthorized immigration

Many countries are currently facing the question of how to deal with unauthorized immigration. Israel provides a rare test case for the consequences of building a border barrier, among other policies, to deal with unauthorized entries into a country. Using quarterly data from unpublished border crossing and immigration records, we document empirically that the establishment of a barrier on the Israeli-Egyptian border led to the complete cessation of unauthorized border crossings at a cost equal to an estimated 10 years of public spending on those who would have entered the country otherwise. Other policies implemented—the detention of apprehended border crossers and voluntary relocations to alternative countries—did not significantly affect unauthorized immigrant inflows or their outflows, respectively. Our results should be of interest to policymakers in countries worldwide facing unauthorized immigration.