Economic and Magnet Effects of Work Authorization for Asylum Seekers: Descriptive Evidence from the United States

Michael Clemens, Amy Nice and Natalia Rigol

No 26169, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: Legalizing work by asylum seekers is politically contested. Many states view work permits as a necessary expedient for self-reliance. Others limit or ban asylum seekers' labor, citing concerns about labor-market competition for natives, fiscal drain, and ‘magnet' effects on subsequent asylum inflows. Empirical tests of these effects are numerous in Europe, rare in the United States. We use full-universe anonymized court records that precisely locate asylum applicants' residences to test the effects of the post-2021 surge in asylum-seeker arrivals on native labor-market outcomes, and on fiscal and economic-growth indicators at the local level. Using a nationality-based shift-share instrument across commuting zones, we find that an asylum-seeker inflow equal to 1% of local population raises incumbent employment by 2.8 percentage points, wages by 6.3%, and local real GDP by approximately 5.5%, while reducing unemployment and means-tested public-benefit reliance. The result is consistent with asylum seekers' labor acting as a strong complement to native labor and native capital in the production process due to task specialization. It is also in line with independent estimates of macroeconomic impacts from general-equilibrium models. We find no relationship between major changes in the number of asylum applications (past collapses and recent surges alike) and changes in US employment-authorization policy for asylum seekers. The evidence supports a substantial stimulus to local economies from asylum seekers' labor, and shows no important role for formal work authorization in asylum seekers' migration decisions.

Keywords: immigration; asylum; forced; economic; impact; employment; irregular (search for similar items in EconPapers)
JEL-codes: H53 J15 J61 K37 R23 (search for similar items in EconPapers)
Date: 2026-06
New Economics Papers: this item is included in nep-mig
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.rfberlin.com/wp-content/uploads/2026/06/26169.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:26169

Access Statistics for this paper

More papers in RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin) Contact information at EDIRC.
Bibliographic data for series maintained by Moritz Lubczyk () and Matthew Nibloe ().