Illegal immigration is a problem because of limited venues to enter the country legally for both:

1. Low Skilled immigrants

2. High Skilled immigrants

3. Sponsoring of family members

H-2A (seasonal visas for agricultural workers) - farmers complain of the regulatory maze

H-2B (seasonal visas for non-agricultural workers) - The Bracero Program proved facilitating immigration in this category can reduce illegal immigration.

H1-B visas (Need a BA or higher, good for 6 years, renewable after 3)

Problems:

High fees

Bureaucracy - "labor certification" is needed

capped at 65,000 most years

Few employer-based green cards (140,000 + country quotas)

EB-5 (immigrant investor visa, 500k minimum and creation of 10 jobs minimum) -

Problems:

high capital requirements

To get a green card - prove 10+ jobs were created in 2 years

Sponsoring family members for permanent residence can take up to 20 years depending on your nationality.

Solution: Increase the number of available visas

1. The population of unauthorized immigrants has kept rising after the broad amnesty of 1986, reaching an estimated 11 million

- increased enforcement and entry limited to H2A and H2B visas capped at 65,000

2. There are no good choices once that happens:

- Deportations violate civil liberties

- Amnesties undermines the rule of law and can have significant ecoomic and immigration consequences.

It rose after the end of the Bracero Program

It has kept rising during the 1970s, 1980s, 1990s, and early 2000s, when as many as 500,000 were entering per year

Mexico is still the main source, but it is declining in importance

Geography clustered in urban areas and, although increasingly more dispersed, primarily concentrated in CA and TX

It has contributed significantly to birth rates in the US

It comprises 5% of the workforce

Relatively low-skilled, mostly working in farming, building, grounds keeping, maintenance and constuction

Immigration Reform and Control Act (1986)

- 245(i) program

Illegal Immigrant Reform and Immigrant Responsibility Act (1996)

Smaller Amnesty: NACARA (1997)

- Targeted Nicaraguans and Central Americans

- Legalized 2.7 million undocumented immigrants

- Increased enforcement

- Created the H2A and H2B visas

Immigrants legalized under IRCA started to become naturalized by 1994 and started sponsoring other family members

- 245(i) program was designed to facilitate that process

Toughened up sponsoring and is the precursor of:

- E-Verify

- Secure Communities program and 297 (g) agreements between local police and ICE

Unauthorized workers

- benefit from greater bargaining power and wages.

Naturalized immigrants and Hispanics

-not so clear, i.e. discrimination?

Natives?

- Not so clear either

Possibly higher income and payroll tax revenues

Possibly higher costs with participation in means-tested programs

Emergency room care

Educational expenditures

Social security and Medicare as they age

Reduced labor mobility

More expensive labor

More expensive goods and services

Need to lower the demand for unauthorized workers and increase employer's ability to access workers legally:

1. Amnesty or Normalization: Temporary work status

2. TWP (Temporary Work Programs): Greater access to temporary work programs

3. E-Verify

1. Staying employed, but earning higher wages

2. Exiting employment due to higher reservation wages and increased access to social services

3. Entering employment due to higher returns to skill

1. Increased INS resources for border enforcement

2. Introduced employer sanctions for knowingly hiring undocumented workers

3. Offered 2 amnesty programs to legalize resident aliens

Total: 2.7 million undocumented immigrants acquired legal permanent resident (LPR) status.

a) General Program - amnesty to 1.6 million illegal aliens

b) SpecialAgricultural Worker (SAW) program - LPR status to 1.1 million undocumented workers.

"Out of the shadows"

Improve working conditions

Reducing workplace vulnerabilities

Increase job mobility

Increase wages

Treatment Group: Newly legalized under IRCA's main amenesty program.

Comparison Group:

- Ideally, randomly selected group of undocumented immigrants ineligible for amnesty.

- That isn't possible (everyone was legalized), so instead they use a sample of Hispanic natives with similar ethnicity, gender composition, age, and labor market experience.

- Allows them to control for concurrent business cycles.

Survey #1: The Legalized Population Survey (LPS)

- A nationally representative dataset designed to analyze the impact of IRCA's main amnesty program on the legalized population

Survey #2: The National Longitudinal Survey of Youth (NLSY79)

- A nationally representative sample of 12,686 civilian young men and women aged 14-21 as of December 31, 1978. This cohort was interviewed annually from 1979 through 1994.

1. Employment rates fell and unemployment rates rose for the newly legalized male population relative to their comparison group.

2. Among immigrant women, employment rates fell but transitions out of the workforce increased relative to Hispanic natives.

3. Furthermore, legalization likely enhanced the wage growth of newly legalized men and women.

Amnesty may have:

1. Increased the quality of job matches

2. Increased job mobility, particularly of men

3. Increased eligibility for social services and reduced labor market participation, particularly for women

E-Verify is an internet-based, free program run by the US government that compares information from an employee's I-9 form to data from US records

- If the information matches, that employee is considered eligible to work in the US

- If there is a mismatch, E-Verify alerts the employer and the employee is allowed to work while he or she resolves the problem, but must contact the appropriate agency to resolve the mismatch.

AZ (enacted Jul-07, implemented Jan-08)

Scope: all

CO (enacted Jun-06, implemented Aug-08)

Scope: public

UT (enacted mar-08, implemented Jul-09)

Scope: public first, all after March 2010

1. Fraud: The system is vulnerable to identity fraud, employer misuse and, as such, does not prevent unauthorized employment.

2. Mobility across sectors/states: Most states that have implemented E-veriy mandates have only enforced them on public agencies and contracts. Additionally, some states contemplate exemptions, such as fairly short-term contracts or employment in small firms.

As a result, workers may still seek employment in:

- The private sector

- Switch to employment exempted from using E-verify

- Migrate to a nearby state without an E-verify mandate, or

- Get 'off-the-books' jobs

1. Have E-verify mandates impacted the employment and wages of likely unauthorized men and women?

2. Has the employment distribution of these workers across industries significantly changed with the enactment and implementation of E-verify mandates?

We answer these two questions while allowing for the impacts to differ according to:

- The scope (state-wide vs. public sector) and

- The timing (enactment vs. implementation date) of the mandate

Hypothesis: The current E-verify system may not only reduce unauthorized employment, but also raise employment costs, increase or decrease wages, and/or increase informal/off-the-books employment.

Potential Outcomes:

Outcome 1: Both employment and wages drop in states w/ e-verify as labor demand declines.

Outcome 2: Employment levels might decrease, but wages may rise, if the supply-side response dominates and workers migrate to other sectors, states or get 'off  the books' employment.

Outcome 3: Finally, overall employment and wages may not change due to high non-compliance and identity fraud rates.

National Conference of State Legislatures: State-level data on year of enactment and implementation and type of state-mandate.

Current Population Survey: Monthly data from January 2004 to December 2010 on employment outcomes and outgoing-rotation group monthly data (subset) for wage data.

- Labor Force Status

- Hourly wages

- Industry

- Education

- Race/ethnicity

- Other demographics

Baseline Sample: Hispanic non-citizen, between 16 and 45 years of age with a HS education or less (group most likely to be unauthorized) 

How has E-Verify impacted the employment and wages of unauthorized men and women?

EMPLOYMENT:

Only state-wide mandates appear to impact the wages of likely unauthorized workers – raising them by 9% immediately after enactment but then lowering them after implementation by 5.8% for a total of a 3.5% increase. 

What are some of the explanations behind the potentially different effect of E-Verify on unauthorized men and women? 

Differential impacts by gender:

Women: The enactment of a state-wide mandate lowers the employment and raises wages -  suggesting large LS reductions.

Men: Employment decreases and wages remain unchanged after the enactment date to decline later on following the implementation of state-wide E-verify mandates - hence, aside form any LS reductions, LD must drop significantly.

Perhaps, women, if in charge of dependent children, are more risk-averse than men.

Alternatively, women might work in industries that differ in the degree to which employers are exempt from e-verify mandates

How has E-Verify impacted the employment distribution of likely unauthorized workers across industries according to the scope of the mandate?

Private HH: where the share of likely unauthorized female workers drops by 4 pp., possibly due to large LS reductions following the enactment of state-wide mandates

What are the 2 overall conclusions about the impact of e-verify mandates in "The Labor Market Impact of Mandated Employment Verification Systems?

1. We find that E-verify mandates, particularly state-wide mandates, significantly curtail the employment probability of likely unauthorized male and female workers.

2. However, the mandates have mixed effects on wages and appear to redistribute likely unauthorized labor towards industries often benefitting from specific exclusions, such as agriculture or food services.

Potentially large economic costs associated with the reshuffling of workers across industries raise concerns about the design and implementation of e-verify mandates on a state-by-state basis.