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Does employing undocumented workers give firms a competitive advantage?

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  • J. David Brown
  • Julie L. Hotchkiss
  • Myriam Quispe-Agnoli

Abstract

Using administrative data from the state of Georgia, this paper finds that on average, among all firms, employing undocumented workers reduces a firm's hazard of exit by 19 percent. However, the impact varies greatly across sectors. In addition, a firm is at a distinct disadvantage if it does not employ undocumented workers but its rivals do. The advantage to employing undocumented workers increases as more firms in the industry do so. In addition, the advantage to a firm from employing undocumented workers decreases with the skill level of the firm's workers, increases with the breadth of a firm's market, and increases with the labor intensity of the firm's production process.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2012-02.

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Date of creation: 2012
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Handle: RePEc:fip:fedawp:2012-02

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. On the advantages of hiring undocumented workers
    by Economic Logician in Economic Logic on 2012-03-29 15:43:00
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Cited by:
  1. Gianmarco Ottaviano & Giovanni Peri, 2013. "New Frontiers Of Immigration Research: Cities And Firms," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 1-7, 02.
  2. Julie L. Hotchkiss & Myriam Quispe-Agnoli & Fernando Rios-Avila, 2012. "The wage impact of undocumented workers," Working Paper 2012-04, Federal Reserve Bank of Atlanta.

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  1. Economic Logic blog

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