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The effects on insurance costs of restricting undocumented immigrants' access to driver licenses

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  • Mauricio Cáceres
  • Kenneth P. Jameson

Abstract

Proponents of issuing driver licenses to undocumented immigrants argue that the number of uninsured motorists and car accidents would decrease, thus improving public safety and lowering costs associated with car insurance. This study gives an overview of competing cost reduction and public safety arguments and examines the issues surrounding undocumented immigrants and driver licenses. It empirically assesses the effect on the average cost of auto insurance of restricting undocumented access to legal driving documents. We use a fixed effects model for panel data to test the effects on real average insurance expenditures of restricting undocumented immigrants' access to driver licenses, while controlling for other relevant factors suggested in the literature. Our main finding is that on net such restrictions raise the average annual cost of auto insurance by an estimated $17.22 ($2009) across states that have enacted such restrictions.

Suggested Citation

  • Mauricio Cáceres & Kenneth P. Jameson, 2015. "The effects on insurance costs of restricting undocumented immigrants' access to driver licenses," Southern Economic Journal, John Wiley & Sons, vol. 81(4), pages 907-927, April.
    • Handle: RePEc:wly:soecon:v:81:y:2015:i:4:p:907-927
    DOI: 10.1002/soej.12022
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    References listed on IDEAS

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    Cited by:

    1. Hans Lueders & Micah Mumper, 2022. "Driving while unauthorized: Auto insurance remains unchanged when providing driver licenses to unauthorized immigrants in California," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 89(3), pages 669-696, September.
    2. Brandyn F. Churchill & Taylor Mackay & Bing Yang Tan, 2021. "Unauthorized Immigrants' Access To Driver'S Licenses And Auto Insurance Coverage," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 107-125, January.
    3. Cho, Heepyung, 2022. "Driver’s license reforms and job accessibility among undocumented immigrants," Labour Economics, Elsevier, vol. 76(C).
    4. Tianyuan Luo & Cesar L. Escalante, 2024. "Driver's licences for undocumented immigrants and post‐mortem organ donation," Economica, London School of Economics and Political Science, vol. 91(361), pages 70-92, January.

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