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States Taking the Reins? Employment Verification Requirements and Local Labor Market Outcomes

Shalise Ayromloo, Benjamin Feigenberg () and Darren Lubotsky

No 26676, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the impact of state-level “E-Verify” legislation that mandates employment eligibility verification for private-sector workers. We document declines in formal sector employment and employment turnover after mandate passage, with effects concentrated among those likeliest to be work-ineligible. Using newly available data, we show that larger firms are far more likely to comply with mandates. Heterogeneity in adherence leads to substantial within-state employment spillovers from larger to smaller firms, as well as a reduction in the number of large firms. We find no evidence that work-ineligible populations relocate or that native-born workers’ labor market outcomes improve in response to mandates.

JEL-codes: J18 J21 J3 J61 J63 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-lab
Note: LS
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