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Understanding the effects of granting work permits to undocumented immigrants

Author

Listed:
  • Joan Monràs
  • Javier Vázquez-Grenno
  • Ferran Elias
Abstract
This paper studies the legalization of 600,000 non-EU immigrants by the unexpectedly elected Spanish government following the terrorist attacks of 2004. By comparing non-EU to EU immigrants we first estimate that the policy did not lead to magnet effects. We then show that the policy change increased labor market opportunities for immigrants by allowing them to enter sectors of the economy with fewer informal employment. We rely on cross-province comparisons to document that payroll-tax revenues increased by around 4,000 euros per legalized immigrant, and the heterogeneous effect of the policy on various groups of workers. We provide a theoretical framework based on monopsonistic competition to guide our empirical work and interpret our findings.

Suggested Citation

  • Joan Monràs & Javier Vázquez-Grenno & Ferran Elias, 2020. "Understanding the effects of granting work permits to undocumented immigrants," Economics Working Papers 1762, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:1762
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    Cited by:

    1. García-Suaza, Andrés & Mondragón-Mayo, Angie & Sarango-Iturralde, Alexander, 2024. "Occupational downgrading of Venezuelan migrants in Colombia: Do work permits Improve occupational mobility?," Documentos de Trabajo 21028, Universidad del Rosario.
    2. Mark Colas & Dominik Sachs, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," CESifo Working Paper Series 8604, CESifo.
    3. Bahar, Dany & Ibáñez, Ana María & Rozo, Sandra V., 2021. "Give me your tired and your poor: Impact of a large-scale amnesty program for undocumented refugees," Journal of Development Economics, Elsevier, vol. 151(C).
    4. Chassamboulli, Andri & Fontaine, Idriss & Gálvez-Iniesta, Ismael & Gomes, Pedro, 2024. "Immigration and labour market flows," Labour Economics, Elsevier, vol. 86(C).
    5. Auriol, Emmanuelle & Mesnard, Alice & Perrault, Tiffanie, 2023. "Temporary foreign work permits: Honing the tools to defeat human smuggling," European Economic Review, Elsevier, vol. 160(C).
    6. Battaglia, Emily, 2023. "Did DACA Harm US-Born Workers? Temporary Work Visas and Labor Market Competition," Journal of Urban Economics, Elsevier, vol. 134(C).
    7. Paula Bustos & Juan Manuel Castro Vincenzi & Joan Monras & Jacopo Ponticelli, 2019. "Structural Transformation, Industrial Specialization, and Endogenous Growth," Working Papers wp2019_1906, CEMFI.
    8. Claudio Deiana & Ludovica Giua & Roberto Nisticò, 2021. "Getting Off on the Wrong Foot: The Long-Term Effects of Missing a Large-Scale Amnesty for Immigrant Workers," CSEF Working Papers 625, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    9. Cascio, Elizabeth U. & Lewis, Ethan G., 2019. "Distributing the Green (Cards): Permanent residency and personal income taxes after the Immigration Reform and Control Act of 1986," Journal of Public Economics, Elsevier, vol. 172(C), pages 135-150.
    10. Sachs, Dominik & Colas, Mark, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," CEPR Discussion Papers 15325, C.E.P.R. Discussion Papers.
    11. Mark Colas & Dominik Sachs, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," Opportunity and Inclusive Growth Institute Working Papers 38, Federal Reserve Bank of Minneapolis.
    12. Ponticelli, Jacopo & Bustos, Paula & Castro-Vincenzi, Juan & Monras, Joan, 2018. "Industrialization without Innovation," CEPR Discussion Papers 13379, C.E.P.R. Discussion Papers.
    13. Stefano Fusaro & Enrique López-Bazo, 2018. "“The Impact of Immigration on Native Employment: Evidence from Italy”," AQR Working Papers 201811, University of Barcelona, Regional Quantitative Analysis Group, revised Jul 2018.
    14. Colas, Mark & Sachs, Dominik, 2022. "The Indirect Fiscal Benefits of Low-Skilled Immigration," Rationality and Competition Discussion Paper Series 352, CRC TRR 190 Rationality and Competition.
    15. Gálvez-Iniesta Ismael, 2022. "The Cyclicality of Immigrant Wages and Labour Market Flows: Evidence from Spain," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 90-122, January.
    16. Claudio Deiana & Ludovica Giua & Roberto Nisticò, "undated". "Legalization and Long-Term Outcomes of Immigrant Workers," Development Working Papers 480, Centro Studi Luca d'Agliano, University of Milano.
    17. Amior, Michael & Stuhler, Jan, 2023. "Immigration, Monopsony and the Distribution of Firm Pay," IZA Discussion Papers 16692, Institute of Labor Economics (IZA).
    18. Sergei Guriev & Biagio Speciale & Michele Tuccio, 2019. "How do Regulated and Unregulated Labor Markets Respond to Shocks? Evidence from Immigrants During the Great Recession," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 35(1), pages 37-76.
    19. Diego Ravenda & Maika M. Valencia-Silva & Josep M. Argiles-Bosch & Josep García-Blandón, 2021. "The Effects of Immigration on Labour Tax Avoidance: An Empirical Spatial Analysis," Journal of Business Ethics, Springer, vol. 170(3), pages 471-496, May.
    20. Edoardo Di Porto & Enrica Maria Martino & Paolo Naticchioni, 2018. "Back to Black? The Impact of Regularizing Migrant Workers," CSEF Working Papers 517, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    21. Ibanez, Ana Maria & Moya, Andres & Ortega, María Adelaida & Rozo, Sandra V. & Urbina, Maria José, 2022. "Life Out of the Shadows: Impacts of Amnesties in the Lives of Migrants," IZA Discussion Papers 15049, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Immigration; undocumented immigrants; public policy evaluation;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J - Labor and Demographic Economics
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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