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The Earnings of Undocumented Immigrants

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  • Borjas, George J.

    (Harvard University)

Abstract

Over 11 million undocumented persons reside in the United States, and there has been a heated debate over the impact of legislative or executive efforts to regularize the status of this population. This paper examines the determinants of earnings for undocumented workers. Using newly developed methods that impute undocumented status for foreign-born persons sampled in microdata surveys, the study documents a number of findings. First, the age-earnings profile of undocumented workers lies far below that of legal immigrants and of native workers, and is almost perfectly flat during the prime working years. Second, the unadjusted gap in the log hourly wage between undocumented workers and natives is very large (around 40 percent), but half of this gap disappears once the calculation adjusts for differences in observable socioeconomic characteristics, particularly educational attainment. Finally, the adjusted wage of undocumented workers rose rapidly in the past decade. As a result, there was a large decline in the wage penalty associated with undocumented status. The relatively small magnitude of the current wage penalty suggests that a regularization program may only have a modest impact on the wage of undocumented workers.

Suggested Citation

  • Borjas, George J., 2017. "The Earnings of Undocumented Immigrants," Working Paper Series rwp17-013, Harvard University, John F. Kennedy School of Government.
  • Handle: RePEc:ecl:harjfk:rwp17-013
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    References listed on IDEAS

    as
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    Cited by:

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    2. Kraemer-Eis, Helmut & Botsari, Antonia & Gvetadze, Salome & Lang, Frank & Torfs, Wouter, 2019. "European Small Business Finance Outlook: June 2019," EIF Working Paper Series 2019/57, European Investment Fund (EIF).
    3. Giuntella, Osea & Lonsky, Jakub & Mazzonna, Fabrizio & Stella, Luca, 2021. "Immigration policy and immigrants’ sleep. Evidence from DACA," Journal of Economic Behavior & Organization, Elsevier, vol. 182(C), pages 1-12.
    4. Xintong Liu & Yang Song, 2020. "Comparing the Ethnicity Proxy and Residual Method: Applications to the State-level DREAM Acts and DACA," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 46(1), pages 82-101, January.
    5. Kraemer-Eis, Helmut & Botsari, Antonia & Gvetadze, Salome & Lang, Frank & Torfs, Wouter, 2019. "European Small Business Finance Outlook: December 2019," EIF Working Paper Series 2019/61, European Investment Fund (EIF).
    6. Kraemer-Eis, Helmut & Botsari, Antonia & Gvetadze, Salome & Lang, Frank & Torfs, Wouter, 2020. "European Small Business Finance Outlook 2020: The impact of COVID-19 on SME financing markets," EIF Working Paper Series 2020/67, European Investment Fund (EIF).
    7. Giuntella, Osea & Lonsky, Jakub, 2020. "The effects of DACA on health insurance, access to care, and health outcomes," Journal of Health Economics, Elsevier, vol. 72(C).
    8. Joni Hersch & Jennifer Bennett Shinall, 2018. "Imputation Match Bias in Immigrant Wage Convergence," Demography, Springer;Population Association of America (PAA), vol. 55(4), pages 1475-1485, August.
    9. Danzer, Alexander M. & Dietz, Barbara, 2018. "Migrants’ well-being during the global financial crisis: Economic and social predictors," Journal of Comparative Economics, Elsevier, vol. 46(3), pages 770-787.
    10. Bradford L. Barham & Ana P. Melo & Thomas Hertz, 2020. "Earnings, Wages, and Poverty Outcomes of US Farm and Low‐Skill Workers," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(2), pages 307-334, June.
    11. Alexander M. Danzer & Barbara Dietz, 2018. "Getting Incentives Right: The economic and social determinants of migrants’ well-being during the global financial crisis," Working Papers 371, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    12. Mónica García-Pérez, 2019. "DACA Recipients and Their Health Insurance Dream: Employment, Schooling, and Health Coverage," Journal of Economics, Race, and Policy, Springer, vol. 2(1), pages 77-108, June.
    13. Nicholas Hill & Richard McGregory & James Peoples, 2018. "Noncitizen Employment and the Wages of Healthcare Support Workers in the US," Journal of Labor Research, Springer, vol. 39(4), pages 433-461, December.
    14. George J. Borjas & David J.G. Slusky, 2018. "Health, Employment, and Disability: Implications from the Undocumented Population," NBER Working Papers 24504, National Bureau of Economic Research, Inc.
    15. Danzer, Alexander M. & Dietz, Barbara, 2018. "The Economic and Social Determinants of Migrants' Well-Being during the Global Financial Crisis," IZA Discussion Papers 11272, Institute of Labor Economics (IZA).
    16. Lucas Guichard, 2020. "Self-selection of Asylum Seekers: Evidence From Germany," Demography, Springer;Population Association of America (PAA), vol. 57(3), pages 1089-1116, June.
    17. Briana Ballis, 2021. "Does Peer Motivation Impact Educational Investments? Evidence From DACA," Working Papers 2021-027, Human Capital and Economic Opportunity Working Group.
    18. 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).

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    More about this item

    JEL classification:

    • 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
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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