Incentives, economically speaking, refer to the choices most people (or enough people to matter, in any event,) will make as a result of a given environment. One of the reasons property rights are so important to a market economy is because when you can't protect what you've earned, you're disinclined to earn things. It's easier to work just hard enough to keep food in your stomach, because anything more probably won't benefit you any.
In a policy-setting environment, this is no less valid. My single biggest beef with the Democratic Party is that they act like incentives are snake oil and hocus-pocus. Incentives are real. Wishing your policy will effect change A simply because you write a law saying "A must be," is frakkin' silly.
To wit: It is unquestionably illegal to come to this country without a visa. Hence, "illegal immigration." However, if you're pregnant, sneak in, and have your child in the United States, our Constitution says that child is a newly minted U.S. citizen. And guess what? Parents do crazy things for their kids. Is it a problem? You tell me.
There's a mistaken belief out there that these kids fast-track their parents to citizenship. If by fast-track, you mean "wait 30 years," then sure. I guess. But that's not the problem. The problem is 1 in every 12 new Americans isn't "supposed" to be an American. If their parents followed the law, they'd be Mexicans (or, also commonly, Koreans. Turns out holding American citizenship exempts you from compulsory military service in South Korea.) If you lie to an immigration officer about your pregnancy, you're in the country illegally - you fraudulently obtained your visa. If you come to this country without a visa at all, you've broken the law too.
So on one hand, we have a law that purports to govern the allocation of the scarce resource that is American citizenship. Not everyone in the world can be American, unless the world over decided tomorrow to petition for admission to the Union, and Congress decided, "I'm down with that." Our immigration laws are supposed to decide how we allocate that resource. On the other hand, we have another law that, by its existence, encourages people to push their children to the front of the line through lies, evasion, and crime. Sure, the Fourteenth Amendment doesn't say,
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. So aliens to the United States should totally sneak in if they want their children to be citizens of the United States....but it doesn't have to. The incentive is there, and no amount of haggling over what the words are matters. The only thing that matters to this debate is that the Fourteenth Amendment encourages people to break our laws to benefit their children. And that is a problem that needs to be fixed.