Download - Sanctions for Whom?
Sanctions for Whom?
Peter [email protected]
UC Berkeley Sociology
The Immigration Reform and Control Act's "Employer Sanctions" Provisions and the Wages of Mexican Immigrants
Employer Sanctions History
1952 Texas Proviso1972 AFL-CIO & NAACP introduce
bill1982 GAO report1986 IRCA
IRCA
General AmnestySAW/H-2A Agricultural
ProgramsIncreased Border
EnforcementEmployer Sanctions
Employer Sanctions
Knowingly Hire/Continue to Employ
I-9 Verification/”Paperwork”Anti-discrimination
Discrimination
GAO Reports 1988, 1989, 1990 (Hiring)
Bansak & Raphael 2001 (Wages)
Legal Status & Wages
Pre-IRCA: No effect net of Human CapitalNorth & Houston 1975, Bailey 1985,
Chiswick 1988, Massey 1987, Borjas 1990
Post-IRCA: Significant effectDonato, Durand & Massey 1992, Donato &
Massey 1993, Phillips & Massey 1999
Interpretation
“(IRCA) represents an attempt to use labor market regulation to control illegal migration into the United States by imposing fines on employers who hire unauthorized workers. Sanctions lower wages directly because they act as a tax on hiring additional workers.”
Cobb-Clark, et al. 1995
Interpretation
“[IRCA] appears to have encouraged discrimination against undocumented migrants, with employers passing the costs and risks of unauthorized hiring on to the workers.”
Phillips and Massey 1999
An Unsatisfying Explanation?
“few civil or criminal fines had been assessed…”
“A low level of enforcement activity could lead many employers to discount the possibility that violations will be detected and punished, thus weakening the deterrent effect.”
Fix and Hill 1990
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Cases Completed Warnings Notice of Intent to Fine Final Orders
INS Sanctions Enforcement Activities FY1992-2003
Source: INS/OIS G23.19-G23.20 as of 10/2604
The Implications
If the decreased wages of unauthorized immigrants cannot be attributed to employers’ expected fines, then something in the post-IRCA era has lead to higher rates of profit for employing unauthorized immigrants.
Could IRCA have created incentives to hire unauthorized immigrants?
The Role of Verification
Data and Methods
CIS Sanctions database:“LYNX” closed cases through early
2000
Mexican Migration Project Survey:Male, Household Heads, US migrants
Preliminary Results
Controlling for Education and English Ability, unauthorized immigrants’ wages are not significantly different than legal immigrants prior to IRCA, but about 18% lower after IRCA.
Preliminary Results
Adding a measure of Expected fines, does not change this result, but implies wages about 14% less for every dollar of expected fines (for all immigrants)
Preliminary Results
Allowing the effect of fines to vary based on legal status does not change the post-IRCA unauthorized effect, but does show no significant effect of fines on legal immigrants, but show that unauthorized immigrants’ wages are approximately 27% lower for each dollar of expected fines.
Can Both Hypotheses be Correct?
Stable and robust post-IRCA status effect
Consistent with low enforcement
Future Directions
Broader MMP sampleEMIF dataNAWS dataEffects on migrant flows