Understanding the Effects of Legalizing Undocumented Immigrants

Joan Monras, Javier Vázquez-Grenno () and Ferran Elias ()
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Javier Vázquez-Grenno: Universitat de Barcelona and IEB
Authors registered in the RePEc Author Service: Javier Vázquez Grenno ()

No 1708, RF Berlin - CReAM Discussion Paper Series from Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM)

Abstract: This paper investigates the consequences of the legalization of around 600,000 immigrants by the unexpectedly elected Spanish government of Zapatero following the terrorist attacks of March 2004 (Garcia-Montalvo, 2011). Using detailed data from payroll-tax revenues, we estimate that each newly legalized immigrant increased local social-security revenues by 3,504 Euros on average. This estimate is only 49 percent of what we would have expected from the size of the newly documented immigrants, which suggests that newly legalized immigrants probably earned lower wages than, and maybe affected the labor-market outcomes of, other workers. We estimate that the policy change deteriorated the labor-market outcomes of some low-skilled natives and immigrants and improved the outcomes of highskilled natives and immigrants. This led some low-skilled immigrants to move away from high-immigrant locations. Correcting for internal migration and selection, we obtain that each newly legalized immigrant increased payroll-tax re nues by 4,368 Euros or 25 percent more than the raw payroll-tax revenue data estimates. This shows the importance of looking both at public revenue data and the labor market to understand the consequences of amnesty programs fully.

Keywords: Immigration; undocumented immigrants; public policy evaluation (search for similar items in EconPapers)
JEL-codes: F22 J31 J61 R11 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-lab, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Working Paper: Understanding the Effects of Legalizing Undocumented Immigrants (2018)
Working Paper: Understanding the Effects of Legalizing Undocumented Immigrants (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:1708

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