Does employing undocumented workers give firms a competitive advantage?
J. David Brown (),
Julie Hotchkiss and
Myriam Quispe-Agnoli ()
No 2012-02, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta
Using administrative data from the state of Georgia, this paper finds that on average, among all firms, employing undocumented workers reduces a firm's hazard of exit by 19 percent. However, the impact varies greatly across sectors. In addition, a firm is at a distinct disadvantage if it does not employ undocumented workers but its rivals do. The advantage to employing undocumented workers increases as more firms in the industry do so. In addition, the advantage to a firm from employing undocumented workers decreases with the skill level of the firm's workers, increases with the breadth of a firm's market, and increases with the labor intensity of the firm's production process.
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Journal Article: DOES EMPLOYING UNDOCUMENTED WORKERS GIVE FIRMS A COMPETITIVE ADVANTAGE? (2013)
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