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Illegal migration and consumption behavior of immigrant households

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  • Dustmann, Christian
  • Fasani, Francesco
  • Speciale, Biagio

Abstract

We analyze the effect of immigrants' legal status on their consumption behavior using unique survey data that samples both documented and undocumented immigrants. To address the problem of sorting into legal status, we propose two alternative identification strategies as exogenous source of variation for current legal status: First, transitory income shocks in the home country, measured as rainfall shocks at the time of emigration. Second, amnesty quotas that grant legal residence status to undocumented immigrants. Both sources of variation create a strong first stage, and - although very different in nature- lead to similar estimates of the effects of illegal status on consumption, with undocumented immigrants consuming about 40% less than documented immigrants, conditional on background characteristics. Roughly one quarter of this decrease is explained by undocumented immigrants having lower incomes than documented immigrants. Our findings imply that legalization programs may have a potentially important effect on immigrants' consumption behavior, with consequences for both the source and host countries.

Suggested Citation

  • Dustmann, Christian & Fasani, Francesco & Speciale, Biagio, 2016. "Illegal migration and consumption behavior of immigrant households," CEPR Discussion Papers 11186, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11186
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    References listed on IDEAS

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    1. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pelizzari, 2010. "Moving to Segregation: Evidence from 8 Italian cities," EIEF Working Papers Series 1109, Einaudi Institute for Economics and Finance (EIEF), revised Apr 2011.
    2. David J. McKenzie & Johan Mistiaen, 2009. "Surveying migrant households: a comparison of census-based, snowball and intercept point surveys," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 172(2), pages 339-360.
    3. Antonio Accetturo & Luigi Infante, 2010. "Immigrant Earnings in the Italian Labour Market," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(1), pages 1-28, April.
    4. Giovanni Mastrobuoni & Paolo Pinotti, 2011. "Migration Restrictions and Criminal Behavior: Evidence from a Natural Experiment," Carlo Alberto Notebooks 208, Collegio Carlo Alberto.
    5. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pellizzari, 2011. "Immigration, Housing Discrimination and Employment," Working Papers 390, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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    Citations

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    Cited by:

    1. Lucia Corno & Alessandra Voena, 2015. "Selling Daughters: Age of Marriage, Income Shocks and Bride Price Tradition," Study Papers 84, Rockwool Foundation Research Unit.
    2. Alexia Lochmann & Hillel Rapoport & Biagio Speciale, 2017. "The Effect of Language Training on Immigrants' Economic Integration - Empirical Evidence from France," CESifo Working Paper Series 6460, CESifo Group Munich.
    3. Christian Dustmann & Tommaso Frattini, 2014. "The Fiscal Effects of Immigration to the UK," Economic Journal, Royal Economic Society, vol. 124(580), pages 593-643, November.
    4. Joan Monras & Javier Vázquez-Grenno & Ferran Elias, 2017. "Understanding the Effects of Legalizing Undocumented Immigrants," CReAM Discussion Paper Series 1708, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    5. Simone Cremaschi & Carlo Devillanova, 2016. "Immigrants and Legal Status: Do Personal Contacts Matter?," CReAM Discussion Paper Series 1629, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    6. Farré, Lídia & Ortega, Francesc & Tanaka, Ryuichi, 2015. "Immigration and School Choices in the Midst of the Great Recession," IZA Discussion Papers 9234, Institute for the Study of Labor (IZA).
    7. Paolo Pinotti, 2017. "Clicking on Heaven's Door: The Effect of Immigrant Legalization on Crime," American Economic Review, American Economic Association, vol. 107(1), pages 138-168, January.
    8. Francesco Fasani, 2015. "Understanding the Role of Immigrants’ Legal Status: Evidence from Policy Experiments," CESifo Economic Studies, CESifo, vol. 61(3-4), pages 722-763.
    9. repec:eee:labeco:v:51:y:2018:i:c:p:184-201 is not listed on IDEAS
    10. Guriev, Sergei & Speciale, Biagio & Tuccio, Michele, 2016. "How do regulated and unregulated labor markets respond to shocks? Evidence from immigrants during the Great Recession," CEPR Discussion Papers 11403, C.E.P.R. Discussion Papers.
    11. Eric Schuss, 2017. "Substantial Labor Market Effects of the Residency Status: How Important Are Initial Conditions at Arrival for Immigrants?," SOEPpapers on Multidisciplinary Panel Data Research 952, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. Lucia Corno & Alessandra Voena, 2016. "Selling daughters: age of marriage, income shocks and the bride price tradition," IFS Working Papers W16/08, Institute for Fiscal Studies.

    More about this item

    Keywords

    consumption behavior; legal status; weather shocks;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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