Immigrants' Regularization and Native Workers' Response

Gianluca Orefice, Giovanni Peri and Gianluca Santoni

No 21781, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Using employer-employee Italian data over the period 1998-2018 we analyze the impact of the largest regularization of undocumented immigrant workers in Italy on wage, employment and mobility outcomes of natives. Our empirical strategy takes advantage of the 2002 Bossi-Fini law that unexpectedly regularized 634,000 undocumented non-EU immigrants, with variation across firms and provinces that was not correlated with previous economic performance. We find that the policy had a small effect on the average wage of native workers and positive effects on their employment at the local labor market level. Additionally, native co-workers in firms more affected by the policy were more likely to change employers in the post-policy period. Such higher mobility resulted in a heterogeneous wage effect across switchers: workers that managed to transition towards better firms experienced wage gains in the medium- and long-run, while other workers experienced wage losses. This implied an increase in wage dispersion for natives and some losers among Italian workers.

Keywords: Workers; Firms (search for similar items in EconPapers)
JEL-codes: F16 J20 J61 (search for similar items in EconPapers)
Date: 2026-07
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