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Illegal Migration and Consumption Behavior of Immigrant Households

Listed author(s):
  • Dustmann, Christian

    ()

    (University College London)

  • Fasani, Francesco

    ()

    (Queen Mary, University of London)

  • Speciale, Biagio

    ()

    (Université Paris 1 Panthéon-Sorbonne)

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.

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File URL: http://ftp.iza.org/dp10029.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10029.

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Length: 71 pages
Date of creation: Jun 2016
Publication status: published in: Journal of the European Economic Association (2017) Volume 15 (3), pp 654–691
Handle: RePEc:iza:izadps:dp10029
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References listed on IDEAS
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  1. 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.
  2. 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.
  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.
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