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Illegal migration and consumption behavior of immigrant households

Author

Listed:
  • Christian Dustmann

    (UCL - University College of London [London])

  • Francesco Fasani

    (QMUL - Queen Mary University of London)

  • Biagio Speciale

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, UCL - University College of London [London])

Abstract

We analyze the effect of immigrants' legal status on their consumption behavior using unique survey data that samples both documented and undocumented immigrants. To address the problem of sorting into legal status, we propose two alternative identification strategies as exogenous source of variation for current legal status: First, transitory income shocks in the home country, measured as rainfall shocks at the time of emigration. Second, amnesty quotas that grant legal residence status to undocumented immigrants. Both sources of variation create a strong first stage, and - although very different in nature - lead to similar estimates of the effects of illegal status on consumption, with undocumented immigrants consuming about 40 percent less than documented immigrants, conditional on background characteristics. Roughly one quarter of this decrease is explained by undocumented immigrants having lower incomes than documented immigrants. Our findings imply that legalization programs may have a potentially important effect on immigrants' consumption behavior, with consequences for both the source and host countries.
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Suggested Citation

  • Christian Dustmann & Francesco Fasani & Biagio Speciale, 2017. "Illegal migration and consumption behavior of immigrant households," PSE-Ecole d'économie de Paris (Postprint) hal-01306603, HAL.
    • Handle: RePEc:hal:pseptp:hal-01306603
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    References listed on IDEAS

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    1. David J. McKenzie & Johan Mistiaen, 2009. "Surveying migrant households: a comparison of census‐based, snowball and intercept point surveys," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 172(2), pages 339-360, April.
    2. Antonio Accetturo & Luigi Infante, 2010. "Immigrant Earnings in the Italian Labour Market," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(1), pages 1-28, April.
    3. Giovanni Mastrobuoni & Paolo Pinotti, 2011. "Migration Restrictions and Criminal Behavior: Evidence from a Natural Experiment," Carlo Alberto Notebooks 208, Collegio Carlo Alberto.
    4. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pellizzari, 2015. "Immigration, Housing Discrimination and Employment," Economic Journal, Royal Economic Society, vol. 125(586), pages 82-114, August.
    5. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pelizzari, 2010. "Moving to Segregation: Evidence from 8 Italian cities," EIEF Working Papers Series 1109, Einaudi Institute for Economics and Finance (EIEF), revised Apr 2011.
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    More about this item

    Keywords

    migration;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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