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Immigration and the Informal Labor Market

Author

Listed:
  • Bosch, Mariano

    (Inter-American Development Bank)

  • Farré, Lídia

    (University of Barcelona)

Abstract

This paper investigates the relationship between immigration and the size of the informal or underground economy. Using regional variation for the Spanish provinces we find that the massive immigration wave between 2000 and 2009 is highly correlated to the share of unregistered employment, a proxy for the size of the underground or informal labor market. We estimate that a 10 percentage points increase in the share of immigrants in a region generates between a 3 and 8 percentage points increase in unregistered employment. We also find that the controversial regularization of illegal aliens conducted in 2005 substantially reduced the number of illegal workers but did not affect the relationship between immigration and informality.

Suggested Citation

  • Bosch, Mariano & Farré, Lídia, 2013. "Immigration and the Informal Labor Market," IZA Discussion Papers 7843, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7843
    as

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    References listed on IDEAS

    as
    1. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    2. Raquel Carrasco & Juan Ramón García & Ana Carolina Ortega, "undated". "The Effect of Immigration on the Employment Opportunities of Native-Born Workers: Some Evidence for Spain," Working Papers 2004-17, FEDEA.
    3. Dominik Enste & Friedrich Schneider, 2002. "Hiding in the Shadows; The Growth of the Underground Economy," IMF Economic Issues 30, International Monetary Fund.
    4. Mr. Friedrich Schneider & Dominik Enste, 2002. "Hiding in the Shadows: The Growth of the Underground Economy," IMF Economic Issues 2002/001, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Migration and democracy
      by nawmsayn in ZeeConomics on 2014-03-06 02:44:19

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    Cited by:

    1. Carmen UZLAU & Mariana BALAN & Corina-Maria ENE, 2017. "Labour Market Vulnerabilities In Romania During The Post- Crisis Period," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 46(2), pages 12-27, June.
    2. Hasan Yuksel, 2021. "An Investigation on the Link between International Labor Migration and Undocumented Employment: Evidence from Turkish Cinema," Journal of Economy Culture and Society, Istanbul University, Faculty of Economics, vol. 64(64), pages 21-46, December.

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    More about this item

    Keywords

    immigration; informal economy; amnesty;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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