IDEAS home Printed from https://ideas.repec.org/a/bla/jrinsu/v89y2022i3p669-696.html
   My bibliography  Save this article

Driving while unauthorized: Auto insurance remains unchanged when providing driver licenses to unauthorized immigrants in California

Author

Listed:
  • Hans Lueders
  • Micah Mumper

Abstract

Several states have recently implemented driver license reforms that give unauthorized immigrants access to driver licenses, aiming to reduce uninsured driving and lower premium costs. We test this expectation in the context of California's Assembly Bill 60 (AB60). AB60 gives about 2.6 million unauthorized immigrants access to driver licenses, making it the largest policy of its kind. Exploiting cross‐county variation in the estimated number of AB60 licenses, we find no measurable effects on auto insurance uptake or premium costs. A power analysis and multiple robustness checks corroborate this conclusion. We interpret our results to suggest that most newly licensed unauthorized immigrants were already driving before the reform to access work and basic services. Furthermore, unauthorized drivers may already have had access to an insured vehicle. Our research revisits prominent claims about the effects of driver license reforms and provides much‐needed empirical evidence to a controversial policy debate.

Suggested Citation

  • Hans Lueders & Micah Mumper, 2022. "Driving while unauthorized: Auto insurance remains unchanged when providing driver licenses to unauthorized immigrants in California," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 89(3), pages 669-696, September.
    • Handle: RePEc:bla:jrinsu:v:89:y:2022:i:3:p:669-696
    DOI: 10.1111/jori.12382
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jori.12382
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jori.12382?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cohen, Alma & Dehejia, Rajeev, 2004. "The Effect of Automobile Insurance and Accident Liability Laws on Traffic Fatalities," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 357-393, October.
    2. Smith, Eric & Wright, Randall, 1992. "Why Is Automobile Insurance in Philadelphia So Damn Expensive?," American Economic Review, American Economic Association, vol. 82(4), pages 756-772, September.
    3. Stephen (Teng) Sun & Constantine Yannelis, 2016. "Quantifying The Premium Externality Of The Uninsured," Journal of the European Economic Association, European Economic Association, vol. 14(2), pages 405-437, April.
    4. David J. Feber & Judith M. Feldmeier & Keith J. Crocker, 2003. "The Economic Effects of Road Safety Improvements: An Insurance Claims Analysis," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(4), pages 651-664, December.
    5. Mauricio Cáceres & Kenneth P. Jameson, 2015. "The effects on insurance costs of restricting undocumented immigrants' access to driver licenses," Southern Economic Journal, John Wiley & Sons, vol. 81(4), pages 907-927, April.
    6. Robert Warren & John Robert Warren, 2013. "Unauthorized Immigration to the United States: Annual Estimates and Components of Change, by State, 1990 to 2010," International Migration Review, Wiley Blackwell, vol. 47(2), pages 296-329, June.
    7. Amuedo-Dorantes, Catalina & Arenas-Arroyo, Esther & Sevilla, Almudena, 2020. "Labor market impacts of states issuing of driver's licenses to undocumented immigrants," Labour Economics, Elsevier, vol. 63(C).
    8. Dahlby, B. G., 1983. "Adverse selection and statistical discrimination : An analysis of Canadian automobile insurance," Journal of Public Economics, Elsevier, vol. 20(1), pages 121-130, February.
    9. repec:wly:soecon:v:81:4:y:2015:p:907-927 is not listed on IDEAS
    10. Khazzoom, J. Daniel, 2000. "What We Know About Uninsured Motorists and How Well We Know What We Know," Discussion Papers 10533, Resources for the Future.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sharon Tennyson, 2007. "Efficiency Consequences of Rate Regulation in Insurance Markets," NFI Policy Briefs 2007-PB-03, Indiana State University, Scott College of Business, Networks Financial Institute.
    2. Cho, Heepyung, 2022. "Driver’s license reforms and job accessibility among undocumented immigrants," Labour Economics, Elsevier, vol. 76(C).
    3. Tianyuan Luo & Cesar L. Escalante, 2024. "Driver's licences for undocumented immigrants and post‐mortem organ donation," Economica, London School of Economics and Political Science, vol. 91(361), pages 70-92, January.
    4. Sharon Tennyson, 2010. "Incentive Effects of Community Rating in Insurance Markets: Evidence from Massachusetts Automobile Insurance," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 35(1), pages 19-46, June.
    5. Dwight Jaffee & Thomas Russell, 1998. "The Causes and Consequences of Rate Regulation in the Auto Insurance Industry," NBER Chapters, in: The Economics of Property-Casualty Insurance, pages 81-112, National Bureau of Economic Research, Inc.
    6. Brandyn F. Churchill & Taylor Mackay & Bing Yang Tan, 2021. "Unauthorized Immigrants' Access To Driver'S Licenses And Auto Insurance Coverage," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 107-125, January.
    7. Dionne, Georges & Michaud, Pierre-Carl & Pinquet, Jean, 2013. "A review of recent theoretical and empirical analyses of asymmetric information in road safety and automobile insurance," Research in Transportation Economics, Elsevier, vol. 43(1), pages 85-97.
    8. Stephen (Teng) Sun & Constantine Yannelis, 2016. "Quantifying the Premium Externality of the Uninsured," Journal of the European Economic Association, European Economic Association, vol. 14(2), pages 405-437.
    9. Yannelis, Constantine & Sun, Stephen Teng, 2013. "The Real Effects of the Uninsured on Premia," MPRA Paper 48264, University Library of Munich, Germany.
    10. Alma Cohen & Peter Siegelman, 2010. "Testing for Adverse Selection in Insurance Markets," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(1), pages 39-84, March.
    11. Georges Dionne, 2012. "The Empirical Measure of Information Problems with Emphasis on Insurance Fraud and Dynamic Data," Cahiers de recherche 1233, CIRPEE.
    12. Mauricio Cáceres & Kenneth P. Jameson, 2015. "The effects on insurance costs of restricting undocumented immigrants' access to driver licenses," Southern Economic Journal, John Wiley & Sons, vol. 81(4), pages 907-927, April.
    13. Dionne, G. & Doherty, N., 1991. "Adverse Selection In Insurance Markets: A Selective Survey," Cahiers de recherche 9105, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    14. Catalina Amuedo‐Dorantes & Francisca M. Antman, 2022. "De facto immigration enforcement, ICE raid awareness, and worker engagement," Economic Inquiry, Western Economic Association International, vol. 60(1), pages 373-391, January.
    15. Fredrik Carlsson & Dinky Daruvala & Olof Johansson‐Stenman, 2005. "Are People Inequality‐Averse, or Just Risk‐Averse?," Economica, London School of Economics and Political Science, vol. 72(287), pages 375-396, August.
    16. Dionne, Georges, 1998. "La mesure empirique des problèmes d’information," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(4), pages 585-606, décembre.
    17. Helge Braun & Winfried Koeniger, 2007. "On the role of market insurance in a dynamic model," The Geneva Papers on Risk and Insurance Theory, Springer;International Association for the Study of Insurance Economics (The Geneva Association), vol. 32(1), pages 61-90, June.
    18. Adam Sawyer, 2016. "Is Money Enough?: The Effect of Migrant Remittances on Parental Aspirations and Youth Educational Attainment in Rural Mexico," International Migration Review, Wiley Blackwell, vol. 50(1), pages 231-266, March.
    19. Dionne, Georges & Harrington, Scott, 2017. "Insurance and Insurance Markets," Working Papers 17-2, HEC Montreal, Canada Research Chair in Risk Management.
    20. van der Star, Sanne M. & van den Berg, Bernard, 2011. "Individual responsibility and health-risk behaviour: A contingent valuation study from the ex ante societal perspective," Health Policy, Elsevier, vol. 101(3), pages 300-311, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jrinsu:v:89:y:2022:i:3:p:669-696. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ariaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.