Research investigates the economic impact of undocumented persons on labor supply

March 30, 2016
By Rebecca Wickel

The Department of Homeland Security estimates that 11.4 million undocumented persons reside in the United States.  As Congress considers proposals to regularize the status of this population by providing a “path to citizenship,” there is a growing need to understand the potential effects the immigration status of this group may have on the labor market.

A new Harvard Kennedy School Faculty Research Working Paper authored by George Borjas, Robert W. Scrivner Professor of Economics and Social Policy at Harvard Kennedy School, responds to this necessity.  The paper examines the labor supply behavior of undocumented immigrants in the United States between 1994-2014, a time marked by both rapid economic growth and deep recession.

Borjas found that the employment gap that distinguishes undocumented men from other groups has widened significantly over the past 20 years.  By 2014 the probability that an undocumented man was employed was around 12 percentage points higher than that of native-born men.  The probability that undocumented women were employed also grew at a relatively faster rate, but the increase was far less dramatic.

The analysis also determined the labor supply of undocumented workers is less responsive to wage changes than legal immigrants and native-born persons. In fact, according to Borjas, the data suggests the labor supply of undocumented men is almost perfectly inelastic, meaning that it is not impacted at all by changes in wages.

In the paper, Borjas emphasizes the importance of continued analysis of the economic status and the wellbeing of undocumented persons so as to better understand the potential impact of comprehensive immigration reform. 

Tags: United States United States

Tags: Immigration Immigration , Labor Economics Labor Economics , Unemployment Unemployment

George Borjas

George Borjas, Robert W. Scrivner Professor of Economics and Social Policy

Photo credit: Martha Stewart

 


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