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Understanding the Effects of Granting Work Permits to Undocumented Immigrants

Author

Listed:
  • Ferran Elias
  • Joan Monras
  • Javier Vázquez-Grenno

Abstract

We study the regularization of 600,000 non-EU immigrants by the unexpectedly elected Spanish government following the terrorist attacks of 2004. By comparing non-EU to EU immigrants, we estimate that the policy did not lead to magnet effects. We then show that immigrant formal employment increased, while that of natives was not affected. However, there was a decrease in informal employment of both native and immigrant low-skilled workers. We document that tax revenues increased by around 4,000 euros per regularized immigrant—with no evidence of increased public expenditures. The evidence also suggests that the policy increased labor market opportunities for immigrants.

Suggested Citation

  • Ferran Elias & Joan Monras & Javier Vázquez-Grenno, 2025. "Understanding the Effects of Granting Work Permits to Undocumented Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 43(3), pages 763-802.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/730122
    DOI: 10.1086/730122
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    Cited by:

    1. Andrés García-Suaza & Angie Mondragón-Mayo & Alexander Sarango-Iturralde, 2024. "Occupational downgrading of Venezuelan migrants in Colombia: Do work permits Improve occupational mobility?," Documentos de Trabajo 21028, Universidad del Rosario.
    2. Auriol, Emmanuelle & Mesnard, Alice & Perrault, Tiffanie, 2023. "Temporary foreign work permits: Honing the tools to defeat human smuggling," European Economic Review, Elsevier, vol. 160(C).
    3. Battaglia, Emily, 2023. "Did DACA Harm US-Born Workers? Temporary Work Visas and Labor Market Competition," Journal of Urban Economics, Elsevier, vol. 134(C).
    4. Amodio, Francesco & Benveniste, Elia & Carillo, Mario Francesco & Riudavets Barcons, Marc, 2025. "The Effect of Migrant Regularization on Labor Exploitation," CEPR Discussion Papers 20750, Centre for Economic Policy Research.
    5. Paula Bustos & Juan Manuel Castro Vincenzi & Joan Monras & Jacopo Ponticelli, 2019. "Structural Transformation, Industrial Specialization, and Endogenous Growth," Working Papers wp2019_1906, CEMFI.
    6. Mark Colas & Dominik Sachs, 2024. "The Indirect Fiscal Benefits of Low-Skilled Immigration," American Economic Journal: Economic Policy, American Economic Association, vol. 16(2), pages 515-550, May.
    7. Cascio, Elizabeth U. & Lewis, Ethan G., 2019. "Distributing the Green (Cards): Permanent residency and personal income taxes after the Immigration Reform and Control Act of 1986," Journal of Public Economics, Elsevier, vol. 172(C), pages 135-150.
    8. Joan Monràs, 2025. "Immigrant Assimilation Beyond the Labor Market," Working Papers 1517, Barcelona School of Economics.
    9. Rocco Molinari & Roberto Impicciatore & Livia Elisa Ortensi, 2024. "Legal Status and Fertility Patterns: Regulation-Induced Disruption Among Previously Undocumented Immigrant Women in Italy," European Journal of Population, Springer;European Association for Population Studies, vol. 40(1), pages 1-28, December.
    10. Gálvez-Iniesta Ismael, 2022. "The Cyclicality of Immigrant Wages and Labour Market Flows: Evidence from Spain," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 90-122, January.
    11. Fernández-Huertas Moraga, Jesús, 2025. "The Second Spanish Immigration Boom," IZA Discussion Papers 18185, IZA Network @ LISER.
    12. García-Suaza, Andres & Mondragón-Mayo, Angie & Sarango-Iturralde, Alexander, 2025. "From Exodus to Employment: Labor Market Transitions and the Role of Work Permits in Colombia," GLO Discussion Paper Series 1606, Global Labor Organization (GLO).
    13. Sergei Guriev & Biagio Speciale & Michele Tuccio, 2019. "How do Regulated and Unregulated Labor Markets Respond to Shocks? Evidence from Immigrants During the Great Recession," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 35(1), pages 37-76.
    14. Rozo, Sandra V. & Quintana, Alejandra & Urbina, María José, 2026. "Electoral effects of integrating forced migrants: Evidence from a Southern Country," World Development, Elsevier, vol. 198(C).
    15. Claudio Deiana & Ludovica Giua & Roberto Nisticò, "undated". "Legalization and Long-Term Outcomes of Immigrant Workers," Development Working Papers 480, Centro Studi Luca d'Agliano, University of Milano.
    16. Bahar, Dany & Ibáñez, Ana María & Rozo, Sandra V., 2021. "Give me your tired and your poor: Impact of a large-scale amnesty program for undocumented refugees," Journal of Development Economics, Elsevier, vol. 151(C).
    17. Chassamboulli, Andri & Fontaine, Idriss & Gálvez-Iniesta, Ismael & Gomes, Pedro, 2024. "Immigration and labour market flows," Labour Economics, Elsevier, vol. 86(C).
    18. Claudio Deiana & Ludovica Giua & Roberto Nisticò, 2021. "Getting Off on the Wrong Foot: The Long-Term Effects of Missing a Large-Scale Amnesty for Immigrant Workers," CSEF Working Papers 625, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    19. Bustos, Paula & Castro-Vincenzi, Juan & Monras, Joan & Ponticelli, Jacopo, 2018. "Industrialization without Innovation," CEPR Discussion Papers 13379, Centre for Economic Policy Research.
    20. Amior, Michael & Stuhler, Jan, 2023. "Immigration, Monopsony and the Distribution of Firm Pay," IZA Discussion Papers 16692, IZA Network @ LISER.
    21. Cervini-Plá, María & Tomàs, Mariona & Vázquez-Grenno, Javier, 2025. "The impact of fare reductions on public transportation use," Economics of Transportation, Elsevier, vol. 44(C).
    22. Stefano Fusaro & Enrique López-Bazo, 2018. "“The Impact of Immigration on Native Employment: Evidence from Italy”," AQR Working Papers 201811, University of Barcelona, Regional Quantitative Analysis Group, revised Jul 2018.
    23. Diego Ravenda & Maika M. Valencia-Silva & Josep M. Argiles-Bosch & Josep García-Blandón, 2021. "The Effects of Immigration on Labour Tax Avoidance: An Empirical Spatial Analysis," Journal of Business Ethics, Springer, vol. 170(3), pages 471-496, May.
    24. Edoardo Di Porto & Enrica Maria Martino & Paolo Naticchioni, 2018. "Back to Black? The Impact of Regularizing Migrant Workers," CSEF Working Papers 517, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    25. Ibanez, Ana Maria & Moya, Andres & Ortega, María Adelaida & Rozo, Sandra V. & Urbina, Maria José, 2022. "Life Out of the Shadows: Impacts of Amnesties in the Lives of Migrants," IZA Discussion Papers 15049, IZA Network @ LISER.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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