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Back to Black? The Impact of Regularizing Migrant Workers

Edoardo Di Porto (), Enrica Martino and Paolo Naticchioni ()

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper provides a firm and individual level analysis of the impact on labor market outcomes of regularizing undocumented migrant workers. Using unique administrative data released by the Italian Social Security Institute, we evaluate Italy's largest ever regularization process. We employ an unexpected quasi-random auditing program to deal with firms' self-selection into treatment. Our results show that regularization has only a short-run positive impact on firm employment and no effect on firm-level wages. Nonetheless, 73.5% of regularized migrants remains within the formal Italian labor market, and we find also that legalized migrant coworkers were not affected (negatively) by the reform. Our findings highlight that high mobility of migrants to other firms, provinces and industries is an important driver of our results.

Keywords: Migration; Legalization; Shadow Economy; Tax Compliance; Policy Evaluation (search for similar items in EconPapers)
JEL-codes: J6 H26 O17 (search for similar items in EconPapers)
Date: 2018-12-04
New Economics Papers: this item is included in nep-eur, nep-iue, nep-lab, nep-mig and nep-soc
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