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Illegal Migration and Consumption Behavior of Immigrant Households

Christian Dustmann, Francesco Fasani and Biagio Speciale

No 775, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: We analyze the effect of immigrants' legal status on their consumption behavior using unique survey data that samples both documented and undocumented immigrants. To address the problem of sorting into legal status, we propose two alternative identification strategies as exogenous source of variation for current legal status: First, transitory income shocks in the home country, measured as rainfall shocks at the time of emigration. Second, amnesty quotas that grant legal residence status to undocumented immigrants. Both sources of variation create a strong first stage, and - although very different in nature - lead to similar estimates of the effects of illegal status on consumption, with undocumented immigrants consuming about 40 percent less than documented immigrants, conditional on background characteristics. Roughly one quarter of this decrease is explained by undocumented immigrants having lower incomes than documented immigrants. Our findings imply that legalization programs may have a potentially important effect on immigrants' consumption behavior, with consequences for both the source and host countries.

Keywords: Legal status; Weather shocks; Consumption behavior (search for similar items in EconPapers)
JEL-codes: F22 D12 K42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law and nep-mig
Date: 2015-12
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Related works:
Journal Article: Illegal Migration and Consumption Behavior of Immigrant Households (2017) Downloads
Working Paper: Illegal migration and consumption behavior of immigrant households (2017)
Working Paper: Illegal Migration and Consumption Behavior of Immigrant Households (2016) Downloads
Working Paper: Illegal migration and consumption behavior of immigrant households (2016) Downloads
Working Paper: Illegal Migration and Consumption Behavior of Immigrant Households (2016) Downloads
Working Paper: Illegal migration and consumption behavior of immigrant households (2015) Downloads
Working Paper: Illegal Migration and Consumption Behavior of Immigrant Households (2015) Downloads
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