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Employment Effects of State Legislation against the Hiring of Unauthorized Immigrant Workers

Author

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  • Bohn, Sarah

    () (Public Policy Institute of California)

  • Lofstrom, Magnus

    () (Public Policy Institute of California)

Abstract

We analyze the impact of the 2007 Legal Arizona Workers Act (LAWA) on employment outcomes of low-skilled Arizona workers, with a focus on the states' unauthorized population. The intent of LAWA was to limit unauthorized workers' economic opportunities as a way to deter further illegal immigration and as such is likely to increase poverty among an already marginalized population. Specifically, we assess whether the legislation reduced the formal employment opportunities of the targeted population. We also look for evidence of an unintended consequence of the policy: whether LAWA pushed workers into informal employment, and if so what are the likely consequences for these workers and their families. Using the synthetic control method developed by Abadie, Diamond and Hainmueller (2010), we find no statistically significant pre-post LAWA differences in wage and salary employment rate for the vast majority of workers in Arizona. Only among the workers most likely to be unauthorized – non-citizen Hispanic men with at most a high school education – do we observe a statistically significant relative decline in the probability of wage and salary employment. We also identify a substantial and statistically significant relative increase in the rate of self-employment among the same group of likely unauthorized workers, and not among other groups. Our data suggests that this shift is likely associated with an increase in poverty among unauthorized immigrants.

Suggested Citation

  • Bohn, Sarah & Lofstrom, Magnus, 2012. "Employment Effects of State Legislation against the Hiring of Unauthorized Immigrant Workers," IZA Discussion Papers 6598, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6598
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    References listed on IDEAS

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    1. repec:mes:jeciss:v:33:y:1999:i:3:p:579-607 is not listed on IDEAS
    2. Sarah Bohn & Magnus Lofstrom & Steven Raphael, 2014. "Did the 2007 Legal Arizona Workers Act Reduce the State's Unauthorized Immigrant Population?," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 258-269, May.
    3. Sarah Bohn & Emily Greene Owens, 2012. "Immigration and Informal Labor," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(4), pages 845-873, October.
    4. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2007. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California's Tobacco Control Program," NBER Technical Working Papers 0335, National Bureau of Economic Research, Inc.
    5. Feige, Edgar L., 1990. "Defining and estimating underground and informal economies: The new institutional economics approach," World Development, Elsevier, vol. 18(7), pages 989-1002, July.
    6. repec:eme:rleczz:s0147-9121(2009)0000029010 is not listed on IDEAS
    7. Lofstrom, Magnus & Wang, Chunbei, 2006. "Hispanic Self-Employment: A Dynamic Analysis of Business Ownership," IZA Discussion Papers 2101, Institute for the Study of Labor (IZA).
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    Cited by:

    1. repec:wbk:wbpubs:28342 is not listed on IDEAS
    2. George J. Borjas, 2016. "The Labor Supply of Undocumented Immigrants," NBER Working Papers 22102, National Bureau of Economic Research, Inc.
    3. repec:eee:labeco:v:46:y:2017:i:c:p:1-13 is not listed on IDEAS
    4. Borjas, George J, 2016. "The Labor Supply of Undocumented Immigrants," Working Paper Series 16-012, Harvard University, John F. Kennedy School of Government.

    More about this item

    Keywords

    illegal; unauthorized; Hispanic; immigration; undocumented; Arizona;

    JEL classification:

    • J8 - Labor and Demographic Economics - - Labor Standards
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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