Beyond the Border: Labor Market Effects of U.S. Immigration Enforcement Policies in El Salvador

By 2020, one in four Salvadorans lived abroad, with 88 percent residing in the United States. The remittances to GDP ratio was about 25 percent, highlighting the country’s dependence on migration. This paper examines the effects of a major U.S. immigration enforcement program—Secure Communities—on migration and labor market outcomes in El Salvador. Using a shift-share identification strategy, we find that larger exposure to the program decreases the likelihood that a household includes a migrant, consistent with increased forced returns. These effects lead to lower income among male workers, particularly low-educated, informal workers, and those in agriculture. We also document a decline in the probability of receiving remittances. The findings suggest that a closure of migration opportunities can increase labor market competition and strain local economies. Effects are most pronounced in municipalities with limited absorptive capacity, underscoring the unintended consequences that U.S. immigration enforcement generates abroad.