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Does Employing Undocumented Workers Give Firms A Competitive Advantage?

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  • J. David Brown
  • Julie L. Hotchkiss
  • Myriam Quispe-Agnoli

Abstract

Using administrative data from the state of Georgia, this paper finds that on average, among all firms, employing undocumented workers reduces a firm's hazard of exit by 19 percent. However, the impact varies greatly across sectors. In addition, a firm is at a distinct disadvantage if it does not employ undocumented workers but its rivals do. The advantage to employing undocumented workers increases as more firms in the industry do so. In addition, the advantage to a firm from employing undocumented workers decreases with the skill level of the firm's workers, increases with the breadth of a firm's market, and increases with the labor intensity of the firm's production process.
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  • J. David Brown & Julie L. Hotchkiss & Myriam Quispe-Agnoli, 2013. "Does Employing Undocumented Workers Give Firms A Competitive Advantage?," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 158-170, February.
    • Handle: RePEc:bla:jregsc:v:53:y:2013:i:1:p:158-170
    DOI: jors.12009
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    1. On the advantages of hiring undocumented workers
      by Economic Logician in Economic Logic on 2012-03-29 20:43:00

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    3. Edwards, Ryan & Ortega, Francesc, 2017. "The economic contribution of unauthorized workers: An industry analysis," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 119-134.
    4. Ortega, Francesc & Hsin, Amy, 2018. "Occupational Barriers and the Labor Market Penalty from Lack of Legal Status," IZA Discussion Papers 11680, Institute of Labor Economics (IZA).
    5. Ortega Francesc & Edwards Ryan & Hsin Amy, 2018. "The Economic Effects of Providing Legal Status to DREAMers," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-18, June.
    6. Esther Salvi & Frank-Martin Belz & Sophie Bacq, 2023. "Informal Entrepreneurship: An Integrative Review and Future Research Agenda," Entrepreneurship Theory and Practice, , vol. 47(2), pages 265-303, March.
    7. John M. Abowd & Kevin L. McKinney & Nellie L. Zhao, 2018. "Earnings Inequality and Mobility Trends in the United States: Nationally Representative Estimates from Longitudinally Linked Employer-Employee Data," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 183-300.
    8. Kaz Miyagiwa & Yasuhiro Sato, 2019. "Illegal immigration, unemployment, and multiple destinations," Journal of Regional Science, Wiley Blackwell, vol. 59(1), pages 118-144, January.
    9. Brunello, Giorgio & Lodigiani, Elisabetta & Rocco, Lorenzo, 2020. "Does low-skilled immigration increase profits? Evidence from Italian local labour markets," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    10. Sandra Orozco-Aleman & Heriberto Gonzalez-Lozano, 2018. "Labor Market Effects of Immigration Policies Border Enforcement and Amnesty," Journal of Labor Research, Springer, vol. 39(2), pages 150-177, June.
    11. Wenya Cheng & John Morrow, 2018. "Firm Productivity Differences From Factor Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 66(1), pages 126-171, March.
    12. Gianmarco Ottaviano & Giovanni Peri, 2013. "New Frontiers Of Immigration Research: Cities And Firms," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 1-7, February.
    13. Ortega, Francesc & Hsin, Amy, 2022. "Occupational barriers and the productivity penalty from lack of legal status," Labour Economics, Elsevier, vol. 76(C).
    14. J. David Brown & Serife Genc & Julie L. Hotchkiss & Myriam Quispe-Agnoli, 2014. "Undocumented Workers' Employment Across U.S. Business Cycles," Contemporary Economic Policy, Western Economic Association International, vol. 32(3), pages 653-670, July.

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