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Monopsony, Efficiency, and the Regularization of Undocumented Immigrants

Author

Listed:
  • George J. Borjas

    (Harvard Kennedy School)

  • Anthony Edo

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

Abstract

In May 1981, President François Mitterrand regularized the status of undocumented immigrant workers in France. The newly legalized immigrants represented 12 percent of the non-French workforce and about 1 percent of all workers. Employers have monopsony power over undocumented workers because the undocumented may find it costly to participate in the open labor market and have restricted economic opportunities. By alleviating this labor market imperfection, a regularization program can move the market closer to the efficient competitive equilibrium and potentially increase employment and wages for both the newly legalized and the authorized workforce. Our empirical analysis reveals that the Mitterrand regularization program particularly increased employment and wages for low-skill native and immigrant men, and raised French GDP by over 1 percent.

Suggested Citation

  • George J. Borjas & Anthony Edo, 2023. "Monopsony, Efficiency, and the Regularization of Undocumented Immigrants," Working Papers halshs-04960370, HAL.
    • Handle: RePEc:hal:wpaper:halshs-04960370
    as

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    Cited by:

    1. is not listed on IDEAS
    2. Christian Dustmann & Uta Schoenberg, 2025. "Linking Empirical Evidence to Theory: A Framework for Understanding Immigrations Labor Market Effects," RFBerlin Discussion Paper Series 2522, ROCKWOOL Foundation Berlin (RFBerlin).

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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