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Distributing the Green (Cards): Permanent Residency and Personal Income Taxes after the Immigration Reform and Control Act of 1986

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  • Elizabeth U. Cascio
  • Ethan G. Lewis

Abstract

We explore how permanent residency affects personal income tax participation and net personal income tax payments using variation from the Immigration Reform and Control Act of 1986 (IRCA), which authorized the largest U.S. amnesty to date. We exploit the timing and geographic unevenness of IRCA’s legalization programs alongside newly digitized data on personal income taxes in California, home to the majority of applicants. Green Cards induced the previously unauthorized to file state income tax returns at rates comparable to other California residents. While the new returns generated little additional revenue through the end of the 1990s, they did raise the incomes of families with children through new claims of the federal Earned Income Tax Credit.

Suggested Citation

  • Elizabeth U. Cascio & Ethan G. Lewis, 2018. "Distributing the Green (Cards): Permanent Residency and Personal Income Taxes after the Immigration Reform and Control Act of 1986," NBER Working Papers 24872, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24872
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    Cited by:

    1. Matilda Kilström & Birthe Larsen & Elisabet Olme, 2023. "Temporary refugee protection and labor-market outcomes," Empirical Economics, Springer, vol. 65(4), pages 1895-1929, October.
    2. Francesco Amodio & Elia Benveniste & Mario F. Carillo & Marc Riudavets-Barcons, 2025. "The Effect of Migrant Regularization on Labor Exploitation," Working Papers wpdea2514, Department of Applied Economics at Universitat Autonoma of Barcelona.
    3. Navid Sabet & Christoph Winter, 2019. "Legal Status, Local Spending and Political Empowerment: The Distributional Consequences of the 1986 IRCA," CESifo Working Paper Series 7611, CESifo.
    4. Joseph-Simon Görlach, 2023. "Borrowing Constraints and the Dynamics of Return and Repeat Migration," Journal of Labor Economics, University of Chicago Press, vol. 41(1), pages 205-243.
    5. Ferlenga, Francesco & Kang, Stephanie, 2025. "Immigrant Rights Expansion and Local Integration: Evidence from Italy," CAGE Online Working Paper Series 775, Competitive Advantage in the Global Economy (CAGE).
    6. Jimena Villanueva Kiser & Riley Wilson, 2024. "DACA, Mobility Investments, and Economic Outcomes of Immigrants and Natives," CESifo Working Paper Series 11106, CESifo.
    7. Sabet, Navid & Winter, Christoph, 2024. "Immigrant legalization and the redistribution of state funds: Evidence from the 1986 IRCA," Journal of Public Economics, Elsevier, vol. 236(C).
    8. Andrea Bernini & Navid Sabet, 2025. "Climbing the Political Ladder with Legal Status: Evidence from the Immigration Reform and Control Act," CESifo Working Paper Series 12081, CESifo.
    9. Francesco Ferlenga & Stephanie Kang, 2025. "Immigrant Rights Expansion and Local Integration: Evidence from Italy," Working Papers 1521, Barcelona School of Economics.
    10. Lonsky, Jakub & Ruiz, Isabel & Vargas-Silva, Carlos, 2022. "Trade networks, heroin markets, and the labor market outcomes of Vietnam veterans," Labour Economics, Elsevier, vol. 78(C).
    11. Navid Sabet, 2023. "Out of the Shadows and into the Classroom: Immigrant Legalization, Hispanic Schooling and Hispanic Representation on School Boards," CESifo Working Paper Series 10677, CESifo.
    12. Kovak, Brian K. & Lessem, Rebecca, 2020. "How do U.S. visa policies affect unauthorized immigration?," Journal of Monetary Economics, Elsevier, vol. 113(C), pages 92-108.

    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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