Hostname: page-component-8448b6f56d-t5pn6 Total loading time: 0 Render date: 2024-04-23T17:17:22.364Z Has data issue: false hasContentIssue false
  • English
  • Français

DEALING WITH UNDOCUMENTED IMMIGRANTS: THE WELFARE EFFECTS OF AMNESTIES AND DEPORTATIONS

Published online by Cambridge University Press:  22 November 2017

Joël Machado
Joël Machado*
Affiliation:
Luxembourg Institute of Socio-Economic Research (LISER)
*
Address correspondence to: Joël Machado, LISER, Maison des Sciences Humaines, 11, Porte des Sciences L-4366, Esch-sur-Alzette/Belval, Luxembourg; e-mail: joel.machado@liser.lu.
Get access

Abstract:

The effects on agents’ welfare of two different policies dealing with undocumented immigrants, amnesties and deportations, are assessed. I develop a two-period overlapping generations model which accounts for the ex-ante production by undocumented workers and their impact on the government budget. Additional channels, such as the discrimination on the labor market and a different productivity of regularized workers are discussed. The impact of a migration policy depends on the wage effects of the legalized/deported workers and their net fiscal contribution. The calibration of the model for the United States in 2014 allows to disentangle the channels at work. Overall, the impact of the two policies on natives’ welfare is limited (between −0.1% and +0.15%). Retired agents benefit from an amnesty and are harmed by a deportation. The effect on workers is ambiguous and depends on the wage and fiscal effects in addition to the change in the returns on savings.

Keywords

undocumented immigrationamnestyregularizationdeportationdiscriminationF29J61J68
Type
Research Papers
Information
Journal of Demographic Economics , Volume 83 , Issue 4 , December 2017 , pp. 445 - 492
Copyright
Copyright © Université catholique de Louvain 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

This paper benefited from the helpful suggestions of three anonymous referees. I am also grateful to Michal Burzynski, David de la Croix, Slobodan Djajic, Frédéric Docquier, Giovanni Facchini, Freddy Heylen, Magnus Lofstrom, Vanessa Lutgen, Ana Maria Mayda, Alice Mesnard, Panu Poutvaara, Hillel Rapoport, Ingmer Schumacher, Thomas Seegmüller, Robert Stelter, and seminar participants for interesting discussions and suggestions. An earlier version was presented at the OLG Days in Vielsalm, the 4th TEMPO conference on International Migration in Nottingham, the PET15 conference in Luxembourg, the RGS/RWI Workshop on the Economics of Immigration 2016, and the Macro-Lunch seminar in Louvain-la-Neuve. The usual disclaimer applies. The author gratefully acknowledges funding by the National Research Fund, Luxembourg (9037210).

References

REFERENCES

Amuedo-Dorantes, Catalina, Bansak, Cynthia and Raphael, Steven (2007) Gender differences in the labor market: Impact of IRCA’s amnesty provisions. American Economic Review 97 (2), 412–416.CrossRefGoogle Scholar
Amuedo-Dorantes, Catalina and Bansak, Cynthia (2011) The impact of amnesty on labor market outcomes: A panel study using the legalized population survey. Industrial Relations 50 (3), 443–471.CrossRefGoogle Scholar
Angrist, Joshua D. (1995) The economic returns to schooling in the West Bank and Gaza Strip. American Economic Review 85 (5), 1065–1087.Google Scholar
Baldwin-Edwards, Martin and Kraler, Albert (2009) Regularisations in Europe: Study on practices in the area of Regularisation of Illegally Staying Third-Country Nationals in the Member States of the EU, Final Report, International Centre for Migration Policy Development (ICMPD).CrossRefGoogle Scholar
Barcellos, Silvia Helena (2010) Legalization and the Economic Status of Immigrants. Working Papers 754, RAND Corporation Publications Department.CrossRefGoogle Scholar
BEA (2017a) U.S. Bureau of Economic Analysis, Table 1.1.10: Percentage Shares of Gross Domestic Product [Accessed 17 February 2017].Google Scholar
BEA (2017b) U.S. Bureau of Economic Analysis, Table 1.1.5: Gross Domestic Product [Accessed 17 February 2017].Google Scholar
BEA (2017c) U.S. Bureau of Economic Analysis, Table 3.1: Government Current Receipts and Expenditures [Accessed 17 February 2017].Google Scholar
Becerra, David, Androff, David K., Ayón, Cecilia and Castillo, Jason T. (2012) Fear vs. Facts: Examining the Economic Impact of Undocumented Immigrants in the U.S. Journal of Sociology & Social Welfare XXXIX (4), 111–136.Google Scholar
Beck, Thorsten and Soledad, Maria Peria, Martinez (2011) What explains the price of remittances? An examination across 119 country corridors. World Bank Economic Review 25 (1), 105–131.CrossRefGoogle Scholar
Benítez-Silva, Hugo, Cárceles-Poveda, Eva and Eren, Selçuk (2011) Effects of Legal and Unauthorized Immigration on the U.S. Social Security System. University of Michigan Retirement Research Center working papers WP 2011-250, University of Michigan.Google Scholar
Borjas, George J. (2003) The labor demand curve is downward sloping: Reexamining the impact of immigration on the labor market. The Quarterly Journal of Economics 118 (4), 1335–1374.CrossRefGoogle Scholar
Borjas, George J., Grogger, Jeffrey and Hanson, Gordon H. (2008) Imperfect Substitution between Immigrants and Natives: A Reappraisal, NBER Working Papers 13887, National Bureau of Economic Research, Inc.CrossRefGoogle Scholar
Borjas, George J. and Tienda, Marta (1993) The employment and wages of legalized immigrants. International Migration Review 27 (4), 712–747.CrossRefGoogle ScholarPubMed
Brown, Anna and Stepler, Renee (2016) Statistical Portrait of the Foreign-Born Population in the United States. Pew Research Center; Available online at: http://www.pewhispanic.org/2016/04/19/ [Accessed 17 February 2017].Google Scholar
Brücker, Herbert and Jahn, Elke J. (2011) Migration and Wage-setting: Reassessing the Labor Market Effects of Migration, Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, no. 6, pp. 286–317.Google Scholar
Card, David (2009) Immigration and inequality. American Economic Review 99 (2), 1–21.CrossRefGoogle Scholar
Casarico, Alessandra, Facchini, Giovanni and Frattini, Tommaso (2012) What Drives Immigration Amnesties? CESifo working paper series 3981, CESifo Group Munich.CrossRefGoogle Scholar
Casarico, Alessandra, Facchini, Giovanni and Frattini, Tommaso (2016) What Drives the Legalization of Immigrants? Evidence from IRCA. IZA discussion papers 9666, Institute for the Study of Labor (IZA).CrossRefGoogle Scholar
Chassambouli, Andri, and Peri, Giovanni (2015) The labor market effects of reducing the number of illegal immigrants. Review of Economic Dynamics 18 (4), 792–821.CrossRefGoogle Scholar
Chau, Nancy H. (2001) Strategic amnesty and credible immigration reform. Journal of Labor Economics 19 (3), 604–634.CrossRefGoogle Scholar
Chau, Nancy H. (2003) Concessional amnesty and the politics of immigration reforms. Economics & Politics 15 (2), 193–224.CrossRefGoogle Scholar
Chiswick, Barry R. (1988) Illegal immigration and immigration control. Journal of Economic Perspectives 2 (3), 101–115.CrossRefGoogle Scholar
Congressional Budget Office (2007) The Impact of Unauthorized Immigrants on the Budgets of State and Local Governments. CBO paper no. 2005, Congress of the United States.Google Scholar
D’Amuri, Francesco, Ottaviano, Gianmarco I.P. and Peri, Giovanni (2010) The labor market impact of immigration in Western Germany in the 1990s, European Economic Review, 54 (4), 550–570, May.CrossRefGoogle Scholar
de la Croix, David and Michel, Philippe (2002) A Theory of Economic Growth, Cambridge University Press.CrossRefGoogle Scholar
di Giovanni, Julian, Levchenko, Andrei and Ortega, Francesc (2015) A global view of cross-border migration. Journal of the European Economic Association 13 (1), 168–202.CrossRefGoogle Scholar
Djajić, Slobodan (1997) Illegal immigration and resource allocation. International Economic Review 38 (1), 97–117.CrossRefGoogle Scholar
Docquier, Frédéric, Özden, Çaglar and Peri, Giovanni (2013) The labor market impact of immigration and emigration in OECD countries. Economic Journal 124 (579), 1106–1145.CrossRefGoogle Scholar
Edwards, Ryan and Francesc, Ortega (2016) The Economic Contribution of Unauthorized Workers: An Industry Analysis. IZA discussion papers 10366, Institute for the Study of Labor (IZA).CrossRefGoogle Scholar
Epstein, Gil S. and Weiss, Avi (2001) A Theory of Immigration Amnesties. IZA discussion papers 302, Institute for the Study of Labor (IZA).CrossRefGoogle Scholar
Epstein, Gil S. and Weiss, Avi (2011) The why, when and how of immigration amnesties. Journal of Population Economics 24 (1), 285–316.CrossRefGoogle Scholar
Ethier, Wilfred J. (1986) Illegal immigration: The host-country problem. American Economic Review 76 (1), 56–71.Google Scholar
Facchini, Giovanni and Maria Mayda, Anna (2009) Does the welfare state affect individual attitudes toward immigrants? Evidence across countries. The Review of Economics and Statistics 91 (2), 295–314.CrossRefGoogle Scholar
Felbermayr, Gabriel, Geis, Wido and Kohler, Wilhelm (2014) Restrictive immigration policy in Germany: Pains and gains foregone? In Wilhelm Kohler, (Ed.), European Economic Integration, WTO Membership, Immigration and Offshoring, World Scientific Book Chapters, vol. 12, pp. 395–419. World Scientific Publishing Co. Pte. Ltd..CrossRefGoogle Scholar
Gang, Ira N. and Yun, Myeong-Su (2006) Immigration Amnesty and Immigrant’s Earnings. Departmental working papers 200632, Rutgers University, Department of Economics.Google Scholar
Hotchkiss, Julie L. and Quispe-Agnoli, Myriam (2008) The Labor Market Experience and Impact of Undocumented Workers. Working paper 2008-07, Federal Reserve Bank of Atlanta.CrossRefGoogle Scholar
ITEP (2016) Undocumented Immigrants’ State & Local Tax Contributions. ITEP Report, The Institute on Taxation & Economic Policy.Google Scholar
Joint Committee on Taxation (2015) Overview of the Federal Tax System as in Effect for 2015, March 30, 2015. Tech. Rep. (JCX-70-15), This document can be found on the Joint Committee on Taxation website at http:\\www.jct.gov.Google Scholar
Karlson, Stephen H. and Katz, Eliakim (2003) A positive theory of immigration amnesties. Economics Letters 78 (2), 231–239.CrossRefGoogle Scholar
Katz, Lawrence F. and Murphy, Kevin M. (1992) Changes in relative wages, 1963–1987: Supply and demand factors. The Quarterly Journal of Economics 107 (1), 35–78.CrossRefGoogle Scholar
Kaushal, Neeraj (2006) Amnesty programs and the labor market outcomes of undocumented workers. The Journal of Human Resources 41 (3), 631–647.CrossRefGoogle Scholar
Kossoudji, Sherrie A. and Cobb-Clark, Deborah A. (2002) Coming out of the shadows: Learning about legal status and wages from the legalized population. Journal of Labor Economics 20 (3), 598–628.CrossRefGoogle Scholar
Levinson, Amanda (2005) The Regularisation of Unauthorized Migrants: Literature Survey and Country Case Studies. Oxford: Centre on Migration, Policy and Society (COMPAS), University of Oxford.Google Scholar
Lofstrom, Magnus, Hill, Laura and Hayes, Joseph (2013) Wage and mobility effects of legalization: Evidence from the new immigrant survey. Journal of Regional Science 53 (1), 171–197.CrossRefGoogle Scholar
Lozano, Fernando A. and Sorensen, Todd A. (2011) The Labor Market Access to Legal Status. IZA discussion papers 5492, Institute for the Study of Labor (IZA).Google Scholar
Magris, Francesco and Russo, Giuseppe (2016) Fiscal revenues and commitment in immigration amnesties. European Journal of Political Economy 42 (C), 75–90.CrossRefGoogle Scholar
Manacorda, Marco, Manning, Alan and Wadsworth, Jonathan (2008) The Labour Market Effects of Immigration. CEP discussion paper CEPCP245.Google Scholar
Massey, Douglas S. (1987) Do undocumented migrants earn lower wages than legal immigrants? New evidence from Mexico. International Migration Review 21 (2), 236–274.CrossRefGoogle ScholarPubMed
Mayr, Karin, Minter, Steffen and Krieger, Tim (2012) Policies on illegal immigration in a federation. Regional Science and Urban Economics 42 (1), 153–165.CrossRefGoogle Scholar
Monras, Joan, Vázquez-Grenno, Javier and Elias Moreno, Ferran (2017) Understanding the Effects of Legalizing Undocumented Immigrants. IZA discussion papers 10687, Institute for the Study of Labor (IZA).CrossRefGoogle Scholar
OECD (2006) International Migration Outlook 2006, OECD Publishing, Paris.Google Scholar
Orrenius, Pia and Zavodny, Madeline (2003) Do amnesty programs reduce undocumented immigration? Evidence from IRCA. Demography 40 (3), 437–450.CrossRefGoogle ScholarPubMed
Orrenius, Pia and Zavodny, Madeline (2004) What Are the Consequences of an Amnesty for Undocumented Immigrants? Working paper 2004-10, Federal Reserve Bank of Atlanta.Google Scholar
Ottaviano, Gianmarco I.P. and Peri, Giovanni (2012) Rethinking the effect of immigration on wages. Journal of the European Economic Association 10 (1), 152–197.CrossRefGoogle Scholar
Palivos, Theodore (2009) Welfare effects of illegal immigration. Journal of Population Economics 22 (1), 131–144.CrossRefGoogle Scholar
Papantoniou-Frangouli, Maria and Maria Leventi, Kleio (2000) The legalization of aliens in Greece. International Migration Review 34 (3), 950–955.CrossRefGoogle Scholar
Passel, Jeffrey S. (2007) Unauthorized Migrants in the United States: Estimates, Methods, and Characteristics, OECD Social, Employment and Migration Working Papers, No. 57, OECD Publishing, Paris.Google Scholar
Passel, Jeffrey S. and Cohn, D'Vera (2016) Size of U.S. Unauthorized Immigrant Workforce Stable After the Great Recession. Pew Research Center, November.Google Scholar
Pastor, Manuel and Scoggins, Justin (2012) Citizen Gain: The Economic Benefits of Naturalization for Immigrants and the Economy. CSII Publications, Center for the Study of Immigrant Integration, University of Southern California.Google Scholar
Reyneri, Emilio (2001) Migrants’ involvement in irregular employment in the Mediterranean Countries of the European Union. International Migration Papers Nr.41.Google Scholar
Rivera-Batiz, Francisco L. (1999) Undocumented workers in the labor market: An analysis of the earnings of legal and illegal Mexican immigrants in the United States. Journal of Population Economics 12 (1), 91–116.CrossRefGoogle ScholarPubMed
Social Security Administration (2013) Effects of Unauthorized Immigration on the Actuarial Status of the Social Security Trust Funds. Actuarial Note 151, Social Security Administration – Office of the Chief Actuary, Baltimore, Maryland.Google Scholar
Social Security Administration (2017) Table: Old-Age and Survivors Insurance Trust Fund, 1937–2016, available online at http://www.ssa.gov [Accessed 17 February 2017].Google Scholar
Steigleder, Quinn and Sparber, Chad (2017) The effect of legal status on immigrant wages and occupational skills. Applied Economics Letters 24 (2), 80–84.CrossRefGoogle Scholar
U.S. Census (2014) U.S. Census Bureau, Population Division, Table 2. Projections of the Population by Nativity for the United States: 2015 to 2060 (NP2014-T2) [Accessed 17 February 2017].Google Scholar