Immigration Reform and the Earnings of Latino Workers: Do Employer Sanctions Cause Discrimination?

Cynthia Bansak and Steven Raphael

University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego

Abstract: This paper investigates whether employer sanctions for hiring undocumented workers introduced by the 1986 Immigration Reform and Control Act (IRCA) adversely affected the hourly earnings of Latino workers in the southwestern U.S. We exploit the staggering of the sanctions and employee verification requirements across sectors to estimate this effect. In particular, IRCA's employer-sanctions provisions were not extended to agricultural employers until two years after their imposition on non-agricultural employers. Hence, Latino agricultural workers provide a control group against which to compare changes in the wages of Latinos in non-agricultural employment. We find substantial pre-post IRCA declines in the hourly earnings of Latino non-agricultural workers relative to Latinos in agriculture. This pattern, however, is considerably stronger for Latino men than Latina women. We do not observe similar inter-sectoral shifts in relative wages among non-Latino white workers. In fact, the relative wage changes for non-Latino white workers are of the opposite sign. Finally, the pre-post IRCA relative decline in Latino non-agricultural wages reverses the pre-IRCA trend, where we observe the relative earnings of Latino non-agricultural workers increasing

Keywords: immigration reform; discrimination; latino earnings (search for similar items in EconPapers)
Date: 1998-08-01
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Citations: View citations in EconPapers (1)

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Journal Article: Immigration Reform and the Earnings of Latino Workers: Do Employer Sanctions Cause Discrimination? (2001)
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