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The Labor Market Value to Legal Status

Author

Listed:
  • Lozano, Fernando A.

    () (Pomona College)

  • Sorensen, Todd A.

    () (University of Nevada, Reno)

Abstract

We present estimates of the effect of legal immigration status on earnings of undocumented workers. Our contribution to the literature centers on a two-step procedure that allows us to first estimate the legal status of an immigrant and then estimate the effect of the Immigration Reform and Control Act (IRCA) on immigrants’ labor market outcomes using a triple difference approach. From a sample of young to middle aged Mexican men, our results show that IRCA causes a 20 log point increase in labor market earnings of Mexican immigrants over the long run, and that nearly all of this increase is in the occupational wage. These results suggest that the primary disadvantage for undocumented workers is the type of jobs that they are able to obtain. We estimate the model for immigrants from other countries not benefiting from IRCA to the extent that Mexican immigrants did, and find no systematic bias towards positive and significant results.

Suggested Citation

  • Lozano, Fernando A. & Sorensen, Todd A., 2011. "The Labor Market Value to Legal Status," IZA Discussion Papers 5492, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5492
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    Citations

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    Cited by:

    1. Pia M. Orrenius & Madeline Zavodny, 2015. "The Impact of Temporary Protected Status on Immigrants' Labor Market Outcomes," American Economic Review, American Economic Association, vol. 105(5), pages 576-580, May.
    2. 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.
    3. Miao Chi, 2017. "Improved legal status as the major source of earnings premiums associated with intermarriage: evidence from the 1986 IRCA amnesty," Review of Economics of the Household, Springer, vol. 15(2), pages 691-706, June.
    4. Emanuele Bracco & Luisanna Onnis, 2015. "Immigration, Amnesties and the Shadow Economy," Carlo Alberto Notebooks 418, Collegio Carlo Alberto.
    5. 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.
    6. Katarzyna Budnik, 2011. "Emigration Triggers: International Migration of Polish Workers between 1994 and 2009," NBP Working Papers 90, Narodowy Bank Polski, Economic Research Department.
    7. Mukhopadhyay, Sankar, 2018. "Comparing Wage Gains from Different Immigrant Legalization Programs," IZA Discussion Papers 11525, Institute for the Study of Labor (IZA).
    8. Pia M. Orrenius and Madeline Zavodny, 2012. "The Economic Consequences of Amnesty for Unauthorized Immigrants," Cato Journal, Cato Journal, Cato Institute, vol. 32(1), pages 85-106, Winter.
    9. Sankar Mukhopadhyay, 2016. "Comparing Wage Gains from Small and Mass Scale Immigrant Legalization Programs," Working Papers 16-001, University of Nevada, Reno, Department of Economics;University of Nevada, Reno , Department of Resource Economics.
    10. 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.
    11. Giovanni Mastrobuoni & Paolo Pinotti, 2014. "The Ups and Downs in Women's Employment: Shifting Composition or Behavior from 1970 to 2010?," Upjohn Working Papers and Journal Articles 14-212, W.E. Upjohn Institute for Employment Research.
    12. Scott R. Baker, 2015. "Effects of Immigrant Legalization on Crime," American Economic Review, American Economic Association, vol. 105(5), pages 210-213, May.
    13. Giovanni Mastrobuoni & Paolo Pinotti, 2015. "Legal Status and the Criminal Activity of Immigrants," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 175-206, April.
    14. repec:eee:regeco:v:67:y:2017:i:c:p:119-134 is not listed on IDEAS
    15. Edwards, Ryan & Ortega, Francesc, 2017. "The economic contribution of unauthorized workers: An industry analysis," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 119-134.
    16. Chi, Miao & Drewianka, Scott, 2014. "How much is a green card worth? Evidence from Mexican men who marry women born in the U.S," Labour Economics, Elsevier, vol. 31(C), pages 103-116.
    17. Comino, Stefano & Mastrobuoni, Giovanni & Nicolò, Antonio, 2016. "Silence of the Innocents: Illegal Immigrants' Underreporting of Crime and their Victimization," IZA Discussion Papers 10306, Institute for the Study of Labor (IZA).
    18. Ortega, Francesc & Edwards, Ryan & Hsin, Amy, 2018. "The Economic Effects of Providing Legal Status to DREAMers," IZA Discussion Papers 11281, Institute for the Study of Labor (IZA).
    19. repec:taf:apeclt:v:24:y:2017:i:2:p:80-84 is not listed on IDEAS
    20. repec:aea:aejpol:v:10:y:2018:i:2:p:117-51 is not listed on IDEAS
    21. 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).
    22. repec:spr:izamig:v:8:y:2018:i:1:d:10.1186_s40176-017-0107-1 is not listed on IDEAS
    23. Ying Pan, 2012. "The Impact of Legal Status on Immigrants’ Earnings and Human Capital: Evidence from the IRCA 1986," Journal of Labor Research, Springer, vol. 33(2), pages 119-142, June.
    24. Quinn Steigleder & Chad Sparber, 2017. "The effect of legal status on immigrant wages and occupational skills," Applied Economics Letters, Taylor & Francis Journals, vol. 24(2), pages 80-84, January.
    25. Comino, Stefano & Mastrobuoni, Giovanni & Nicolò, Antonio, 2016. "Silence of the Innocents: Illegal Immigrants' Underreporting of Crime and their Victimization," IZA Discussion Papers 10306, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    immigration; legal status; immigration reform;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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