State Policy Effects on Unauthorized Immigration

Thinkstock/Alexsander Stojanov

The national effects of policies aimed at unauthorized immigration are relatively well-known. But there is a growing amount of literature on the efforts by states to address unauthorized immigration. A recent article in The Regional Economist examines some of this literature.

Subhayu Bandyopadhyay, research officer and economist with the Federal Reserve Bank of St. Louis, and his co-authors¹ noted that states boosting enforcement against unauthorized immigration affects whether these immigrants move to or stay in these states. In turn, these movement decisions impact not only the states that are increasing enforcement, but also surrounding states. For example:

• Unauthorized immigrants may move to a state with less enforcement, potentially shoring up labor shortfalls in that state.
• States receiving additional unauthorized immigrants may find their finances burdened, especially if these families don’t pay taxes.

The authors noted that, presumably, stricter enforcement standards are enacted because the benefits outweigh the drawbacks. So what have the actual impacts been? The authors discussed several recent studies on the topic.

E-Verify and Labor Markets

Economists Pia Orrenius and Madeline Zavodny examined seven states that implemented universal E-Verify mandates between 2008 and 2012. All employers in these states are required to use E-Verify to see if workers are authorized to work in the U.S. If not, they are required to fire these workers.

The authors found that:

• Hourly earnings declined 8 percent for male Mexican immigrants who are likely to be unauthorized.
• Employment effects, however, were not significant for this group.
• Labor force participation for female immigrants who are likely unauthorized actually increased.
• There didn’t seem to be an effect on labor market outcomes for non-Hispanic whites.
• Male immigrants from Mexico who became naturalized citizens saw improved outcomes.

Arizona

Economist Sarah Bohn and her co-authors focused specifically on Arizona’s implementation of an E-Verify mandate. They found a significant reduction in the proportion of Arizona’s Hispanic noncitizen population. However, they did not find a similar decline for Hispanic naturalized citizens. The authors suggested two reasons:

• Those planning to migrate illegally to Arizona may have chosen another destination.
• Those already in Arizona may have moved elsewhere once they were impacted by this mandate.

Generous Benefits

The authors of The Regional Economist article noted that the opposite of increased enforcement would be generous provisions of local goods by states.

A study by economist Anita Pena found that, in California (a high-benefit state) for example, legal immigrants were drawn by generous welfare benefits to a greater degree than the native U.S. population. However, undocumented immigrants were less prone, relative to natives, to be attracted to California for this reason. Among the reasons given for this finding was the possibility that undocumented workers weren’t planning to stay in the state for very long, so the benefits weren’t as significant to them.

Conclusion

The Regional Economist article authors concluded: “This article suggests that state policies have an important bearing on labor market outcomes in states implementing them, as well as in other destination states for the unauthorized immigrants. A desirable immigration policy for the nation would probably benefit from a careful consideration of both the national and the regional effects, some of which we have highlighted in this piece.”

Notes and References

¹ Jonathan Munemo, an associate professor of economics at Salisbury University, and Santiago Pinto, an economist at the Federal Reserve Bank of Richmond.

² Orrenius, Pia M.; and Zavodny, Madeline. "The Impact of E-Verify Mandates on Labor Market Outcomes," Southern Economic Journal, April 2015, Vol. 81, No. 4, pp. 947-59.

³ Bohn, Sarah; Lofstrom, Magnus; and Raphael, Steven. "Did the 2007 Legal Arizona Workers Act Reduce the State's Unauthorized Immigrant Population?" The Review of Economics and Statistics, May 2014, Vol. 96, No. 2, pp. 258-69.

⁴ Pena, Anita A. "Undocumented Immigrants and the Welfare State: The Case of Regional Migration and U.S. Agricultural Labor," Journal of Regional Science, January 2014, Vol. 54, No. 1, pp. 96-113.

Additional Resources

• Regional Economist: States’ Efforts To Curtail Unauthorized Immigration Draw More Attention
• On the Economy: Oil Prices’ Effect on Employment Growth
• On the Economy: Career Switching Is Occurring Less Often, not More