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States Taking the Reins? Employment Verification Requirements and Local Labor Market Outcomes

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  • Shalise Ayromloo
  • Benjamin Feigenberg
  • Darren Lubotsky

Abstract

We estimate the impact of state-level “E-Verify” legislation that mandates employment eligibility verification for private-sector workers. We document declines in formal sector employment and employment turnover after mandate passage, with effects concentrated among those likeliest to be work-ineligible. Using newly available data, we show that larger firms are far more likely to comply with mandates. Heterogeneity in adherence leads to substantial within-state employment spillovers from larger to smaller firms, as well as a reduction in the number of large firms. We find no evidence that work-ineligible populations relocate or that native-born workers’ labor market outcomes improve in response to mandates.

Suggested Citation

  • Shalise Ayromloo & Benjamin Feigenberg & Darren Lubotsky, 2020. "States Taking the Reins? Employment Verification Requirements and Local Labor Market Outcomes," NBER Working Papers 26676, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26676
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    References listed on IDEAS

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    1. Chloe N. East & Annie L. Hines & Philip Luck & Hani Mansour & Andrea Velásquez, 2023. "The Labor Market Effects of Immigration Enforcement," Journal of Labor Economics, University of Chicago Press, vol. 41(4), pages 957-996.
    2. Christian Gunadi, 2018. "Does stricter immigration policy affect college enrollment and public-private school choice of natives?," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-26, December.
    3. Sarah Bohn & Magnus Lofstrom & Steven Raphael, 2014. "Did the 2007 Legal Arizona Workers Act Reduce the State's Unauthorized Immigrant Population?," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 258-269, May.
    4. Andri Chassambouli & Giovanni Peri, 2015. "The Labor Market Effects of Reducing the Number of Illegal Immigrants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(4), pages 792-821, October.
    5. Lewis, Ethan & Peri, Giovanni, 2015. "Immigration and the Economy of Cities and Regions," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 625-685, Elsevier.
    6. Michael A. Clemens & Ethan G. Lewis & Hannah M. Postel, 2018. "Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion," American Economic Review, American Economic Association, vol. 108(6), pages 1468-1487, June.
    7. Catalina Amuedo-Dorantes & Cynthia Bansak, 2014. "Employment Verification Mandates And The Labor Market Outcomes Of Likely Unauthorized And Native Workers," Contemporary Economic Policy, Western Economic Association International, vol. 32(3), pages 671-680, July.
    8. Christian Dustmann & Albrecht Glitz, 2015. "How Do Industries and Firms Respond to Changes in Local Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 711-750.
    9. repec:wly:soecon:v:81:4:y:2015:p:928-946 is not listed on IDEAS
    10. repec:wly:soecon:v:81:4:y:2015:p:947-959 is not listed on IDEAS
    11. Bohn, Sarah & Lofstrom, Magnus & Raphael, Steven, 2015. "Do E-Verify Mandates Improve Labor Market Outcomes of Low-Skilled Native and Legal Immigrant Workers?," IZA Discussion Papers 9420, Institute of Labor Economics (IZA).
    12. Borjas, George J. & Cassidy, Hugh, 2019. "The wage penalty to undocumented immigration," Labour Economics, Elsevier, vol. 61(C).
    13. repec:wly:soecon:v:81:4:y:2015:p:960-979 is not listed on IDEAS
    14. Pia M. Orrenius & Madeline Zavodny & Emily Gutierrez, 2018. "Do State Employment Eligibility Verification Laws Affect Job Turnover?," Contemporary Economic Policy, Western Economic Association International, vol. 36(2), pages 394-409, April.
    15. Chloe N. East & Annie L. Hines & Philip Luck & Hani Mansour & Andrea Velásquez, 2023. "The Labor Market Effects of Immigration Enforcement," Journal of Labor Economics, University of Chicago Press, vol. 41(4), pages 957-996.
    16. Sarah Bohn & Robert Santillano, 2017. "Local Immigration Enforcement and Local Economies," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(2), pages 236-262, April.
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    Cited by:

    1. Christian Dustmann & Hyejin Ku & Tetyana Surovtseva, 2023. "Real Exchange Rates and the Earnings of Immigrants," The Economic Journal, Royal Economic Society, vol. 134(657), pages 271-294.
    2. Parag Mahajan, 2021. "Immigration and Local Business Dynamics: Evidence from U.S. Firms," Working Papers 21-18, Center for Economic Studies, U.S. Census Bureau.
    3. Pia M. Orrenius & Madeline Zavodny, 2021. "The effect of employer enrolment in E-Verify on low-skilled U.S. workers," Applied Economics Letters, Taylor & Francis Journals, vol. 28(11), pages 954-957, June.
    4. Amuedo Dorantes, Catalina & Arenas-Arroyo, Esther & Mahajan, Parag & Schmidpeter, Bernhard, 2023. "Low-wage jobs, foreign-born workers, and firm performance," Ruhr Economic Papers 1040, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Michael A. Clemens & Ethan G. Lewis, 2022. "The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery," CESifo Working Paper Series 10057, CESifo.
    6. Brandyn Churchill, 2021. "E‐Verify mandates and unauthorized immigrants' health insurance coverage," Southern Economic Journal, John Wiley & Sons, vol. 88(2), pages 487-526, October.

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    More about this item

    JEL classification:

    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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