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Back to Black? The Impact of Regularizing Migrant Workers

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Abstract

This paper provides a firm and individual level analysis of the impact on labor market outcomes of regularizing undocumented migrant workers. Using unique administrative data released by the Italian Social Security Institute, we evaluate Italy's largest ever regularization process. We employ an unexpected quasi-random auditing program to deal with firms' self-selection into treatment. Our results show that regularization has only a short-run positive impact on firm employment and no effect on firm-level wages. Nonetheless, 73.5% of regularized migrants remains within the formal Italian labor market, and we find also that legalized migrant coworkers were not affected (negatively) by the reform. Our findings highlight that high mobility of migrants to other firms, provinces and industries is an important driver of our results.

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  • Edoardo Di Porto & Enrica Maria Martino & Paolo Naticchioni, 2018. "Back to Black? The Impact of Regularizing Migrant Workers," CSEF Working Papers 517, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:517
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    Cited by:

    1. Effrosyni Adamopoulou & Ezgi Kaya, 2020. "Not just a work permit: EU citizenship and the consumption behaviour of documented and undocumented immigrants," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1552-1598, November.
    2. Monras, Joan & Vázquez-Grenno, Javier & Elias, Ferran, 2018. "Understanding the Effects of Granting Work Permits to Undocumented Immigrants," CEPR Discussion Papers 12726, C.E.P.R. Discussion Papers.
    3. Claudio Deiana & Ludovica Giua & Roberto Nisticò, "undated". "Legalization and Long-Term Outcomes of Immigrant Workers," Development Working Papers 480, Centro Studi Luca d'Agliano, University of Milano.
    4. Monras, Joan & Polo-Muro, Eduardo & Vázquez-Grenno, Javier, 2023. "Labor Market Stability and Fertility Decisions," CEPR Discussion Papers 18613, C.E.P.R. Discussion Papers.
    5. Claudio Deiana & Ludovica Giua & Roberto Nisticò, 2021. "Getting Off on the Wrong Foot: The Long-Term Effects of Missing a Large-Scale Amnesty for Immigrant Workers," CSEF Working Papers 625, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    6. Dávalos, María Eugenia & Ardila Vargas, Luz Karine & Garcia-Suaza, Andres, 2023. "Barriers to the Integration of Venezuelan Migrants and Refugees in Colombia," Documentos de Trabajo 20822, Universidad del Rosario.
    7. Vittoria Dicandia & Silvia Vannutelli, 2025. "Immigrants' Legalization and Firms: Evidence from the 2007 EU Enlargement," Working Papers 25-04, Federal Reserve Bank of Cleveland.

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    More about this item

    Keywords

    Migration; Legalization; Shadow Economy; Tax Compliance; Policy Evaluation;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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