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The Effect of Legal Status on Immigrant Wages and Occupational Skills

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Abstract

Native and foreign-born workers with a high school degree or less educational attainment provide unique occupational skills to the US labor force. This regularity might be driven, in part, by limited access to occupations for immigrants lacking legal rights to work in the US. This paper exploits exogenous policy change induced by the 1986 Immigration Reform and Control Act (IRCA) to perform triple-difference estimation examining whether legal status causes immigrants to work in occupations that use skills more similar to those of native-born workers. We find that legal status decreases the manual skill intensity of Mexican immigrants by two percentiles. It increases communication skill intensity by an equivalent amount. This effect reduces the skill gap between Mexican-born and native-born American workers by 13%.

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  • Steigleder, Quinn & Sparber, Chad, 2015. "The Effect of Legal Status on Immigrant Wages and Occupational Skills," Working Papers 2015-05, Department of Economics, Colgate University, revised 06 Aug 2015.
    • Handle: RePEc:cgt:wpaper:2015-05
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    Cited by:

    1. 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.
    2. Magris, Francesco & Russo, Giuseppe, 2016. "Fiscal Revenues and Commitment in Immigration Amnesties," European Journal of Political Economy, Elsevier, vol. 42(C), pages 75-90.
    3. Casarico, Alessandra & Facchini, Giovanni & Frattini, Tommaso, 2018. "What drives the legalization of immigrants? Evidence from IRCA," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 258-273.
    4. Altangerel, Khulan, 2019. "Essays on immigration policy," Other publications TiSEM 954c6300-249e-496c-8cef-0, Tilburg University, School of Economics and Management.
    5. Mariele Macaluso, 2022. "The influence of skill-based policies on the immigrant selection process," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 595-621, July.
    6. Wen Ci & Feng Hou & René Morissette, 2018. "Acquisition of permanent residence by temporary foreign workers in Canada: a panel study of labour market outcomes before and after the status transition," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-24, December.

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    More about this item

    Keywords

    Immigration; Occupational Skills; Natural Experiment;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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