Administrative Action on Immigration Reform

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Administrative Actionon Immigration ReformThe Fiscal Benefits of Temporary Work Permits

By Patrick Oakford September 2014


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Administrative Actionon Immigration ReformThe Fiscal Benefits of Temporary Work Permits

By Patrick Oakford September 2014


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1 Introduction and summary

4 Putting millions of workers

and employers on the tax rolls

5 Higher wages for workers,

increased tax revenues for America

8 Estimating fiscal benefits

of administrative action

12 Conclusion

14 Appendix

21 Endnotes

Contents


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1 Center for American Progress | Administrative Action on Immigration Reform

Introduction and summary

In he coming monhs, Presiden Barack Obama is expeced o announce a series

o adminisraive acions on immigraion.1Tese acions will come afer more

han a decade o inacion on immigraion reorm in Congress, including he

House o Represenaives recen reusal o voe on he biparisan immigraion

reorm bill, S. 744, passed by he Senae las summer.2Te Congressional Budge

Office esimaed ha S. 744 would significanly reduce our naions defici and

spur economic growh.3

Alhough any execuive acion adoped by he presiden will pale in comparison

o he economic and fiscal impac o a comprehensive legislaive soluion such

as S. 744, such acions can noneheless deliver significan fiscal benefis. Tis

repor examines he fiscal impac o a variey o scenarios in which undocu-

mened immigrans are emporarily proeced rom deporaion and auhorized

o work in he inerim.

Conroned by a deerioraing immigraion sysem and coninued paralysis in

Congress, Presiden Obama requesed Secreary o Homeland Securiy Jeh

Johnson and Atorney General Eric Holder o ideniy which adminisraive

acions could be adoped o begin he process o fixing our immigraion sysem.

One o he significan adminisraive seps he presiden can ake is expand-

ing a policy auhorizing undocumened immigrans who are deemed o be low

enorcemen prioriies o affirmaively reques deerred acion. Deerred acion

is a emporary, discreionary reprieve rom deporaion ha enables he govern-

men o ocus is limied resources on high-prioriy enorcemen arges while

bringing low-prioriy individuals ou o he shadows. In addiion o he obvious

enorcemen and securiy benefis ha flow rom expanding he universe o indi-

viduals eligible o regiser and reques his exercise o discreion, enabling heseindividuals o work lawully, albei emporarily, also riggers significan fiscal

benefis in he orm o addiional payroll ax revenues.


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Graning deerred acion wih work permis would increase he

amoun o payroll ax revenue colleced each year. Firs, by allow-

ing undocumened immigrans o work legally, many workers and

employers will be able o emerge rom he underground economy

and pay payroll axes or he firs ime. oday, slighly more han

one-hird o undocumened workers and heir employers areconribuing payroll axes.7Providing work permis would creae

a legal avenue or workers and employers o conribue axes.

Second, allowing undocumened immigrans o work legally

will lead o higher wages. Providing work auhorizaion o

eligible undocumened immigrans would equip hem wih a

shield agains workplace exploiaion and enable hem o move

reely across he labor marke o find jobs ha bes mach heir

skills. Consequenly, undocumened immigrans will observe an

increase in heir earnings. And as workers wages rise, so oo willheir payroll ax conribuions.

Te magniude o he ax revenue gains, however, varies based on

he number o immigrans eligible or deerred acion. Tere are a

number o crieria ha Presiden Obama could choose rom when

deermining who will be eligible or deerred acion. For example,

deerred acion may only be available o hose who have been in

he Unied Saes or a leas 10 years. Alernaively, he presiden

could exend deerred acion o hose who would have been able

o apply or legal saus and ciizenship under he immigraion

reorm bill, S. 744, passed by he Senae in June 2013.

In he ollowing analysis, he Cener or American Progress

esimaes he fiscal impac o a deerred acion program or each

o hese groups:

Undocumened immigrans who have lived in he Unied

Saes or a leas five years.

Undocumened immigrans who have lived in he Unied Saes or a leas10 years.

Undocumened immigrans who have a minor child living in he Unied Saes.

The president has the legal authority and a

deal of latitude when deciding how to enfo

our immigration laws in the most efficient a

effective way. Just like a local police chief h

ability to decide whether to focus resources

ticketing people for jay walking or arresting

ple for driving while intoxicated, the presid

the legal authority to determine which indi

are a priority for immigration enforcement.

known as prosecutorial discretion.

One type of prosecutorial discretion policie

immigration context is deferred action, wh

was formerly recognized by the ImmigratioNaturalization Services in 1975.4A deferred

policy identifies low-priority individuals, su

non-criminals, who are not the target of im

tion enforcement efforts, and creates a proc

them to come forward and affirmatively ap

temporary relief from deportation. Most rec

this form of discretion was utilized in the De

Action for Childhood Arrivals, or DACA, pro

DACA was announced in June 2012 and ext

to undocumented immigrants who have en

the United States before the age of 16 and education requirements such as graduating

school.5To date, DACA has successfully allo

the U.S. Department of Homeland Security,

DHS, to better focus its resources on higher

priorities by granting temporary reprieves f

deportation to nearly 600,000 individuals.6

Deferred action


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TABLE 1

Fiscal benefits from deferred action

Increase in payroll tax revenues by criteria of eligibility

Number of eligible

undocumented

immigrants,

in millions

Payroll tax gain

in first year,

in billions

Cumulative payroll

tax gains over five

years, in billions

U.S. residency for at least

5 years9.95 $6.08 $44.96


10 years7.4 $4.52 $33.44

Undocumented immi-

grants with

a minor child in the

United States

4.7 $2.87 $21.24

Source: Authors calculations. See Methodology.

Te analysis shows ha he Unied Saes sands o gain a significan amoun o

new revenue rom a deerred acion program. Mos sriking is ha he payroll ax

revenue gains would be realized immediaelywihin he firs yearand only

grow over ime as more immigrans apply or relie under he program and receive

a work permi. Te analysis finds:

emporary work permis would increase he earnings o undocumened immi-

grans by abou 8.5 percen as hey are able o work legally and find jobs ha

mach heir skills.

A deerred acion program ha allows undocumened immigrans who have

lived in he Unied Saes or a leas five years o apply or a emporary work

permi would increase payroll ax revenues by $6.08 billion in he firs year alone

and increase revenues by $44.96 billion over five years.

I Presiden Obama insead exends deerred acion o a smaller number o undoc-

umened immigrans hen he payroll ax revenue gains would no be as high.

Tis repor begins wih a discussion o why deerred acion would rigger anincrease in ax revenues. I hen presens he findings o he CAP analysis ha

quanifies he increase in payroll ax revenues ha would resul rom exending

deerred acion o undocumened immigrans.


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Putting millions of workers

and employers on the tax rolls

Our broken immigraion sysem has creaed a siuaion in which millions o

undocumened immigrans are working, ye none o hem have a legal avenue o

conribue payroll axes.8Tus, billions o dollars are los every year in ax revenues.

A deerred acion program, which allows undocumened immigrans o apply or

a emporary work permi, would correc hese inadequacies o our curren sysem

and increase payroll ax revenues by increasing he number o people paying axes.

Tere are currenly 8 million undocumened immigrans in he Unied Saes who

are working in a variey o indusries, rom agriculure o manuacuring.9Whilehese workers are vial o our economy and workorce, here is no legal way or

hem o pay payroll axes: Given heir unlawul saus and inabiliy o work legally,

hese workers are unable obain a Social Securiy number and hereore canno file

payroll axes like oher American workers.10

Despie his srucural shorcoming, he Social Securiy Adminisraion, or SSA,

has esimaed ha abou 3 million undocumened workers and heir employ-

ers paid payroll axes in 2010, or abou 38 percen o he esimaed 8 million

undocumened workers.11According o he SSA, many o hese workers likely

pay payroll axes hrough he use o alse Social Securiy numbers.12While hese

workers conribuions have been significan, hey are ar less han wha hey

could be i he Unied Saes creaed he opporuniy or undocumened work-

ers o boh legally work and pay axes.

Under a deerred acion program, undocumened immigrans whose applica-

ions or a work permi have been approved would receive an Employmen

Auhorizaion Card, or EAC.13Tese cards conain a unique nine-digi number.

Similar o a Social Securiy number, an EAC proves ha an individual is eligible

o work legally and allows him or her o fill ou he needed IRS orms wih anemployer o conribue payroll axes. Given ha only a minoriy o undocumened

workers and heir employers are currenly paying payroll axes, providing undocu-

mened immigrans wih EACs would lead o a significan increase in he number

o workers and employers conribuing payroll axes. Ulimaely, exending a work

permi o undocumened immigrans will creae a pah or hose already working

in he Unied Saes o come orward and pay axes.

Ultimately, extend

a work permit to

undocumented

immigrants will cre

a path for those

already working in

United States to co

forward and pay ta


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Higher wages for workers,

increased tax revenues for America

In addiion o puting more employers and workers on he books, ax revenues

would increase because he acquisiion o a emporary work permi would likely

increase he earnings o undocumened immigrans or wo main reasons:

I enables workers o shed he negaive effec heir immigraion saus has on

heir earnings. I allows undocumened workers o have ull access o he labor marke,

enabling hem o find jobs ha mach heir skills and maximize heir earnings.

Since payroll ax conribuions are based on an employees wages, as an employees

earnings increase, heir ax conribuions generally increase as well.14

Eliminating negative wage effects of undocumented status

Te ineracion beween our broken immigraion sysem and employmen and

labor laws have made undocumened workers more suscepible o exploiaion in

he workplace, leading hem o earn lower wages han hey oherwise could.

Undocumened immigrans, while no legally allowed o work in he Unied

Saes, are sill covered by many U.S. employmen and labor laws, such as mini-

mum-wage requiremens and he righ o organize a union.15Despie having he

same workplace righs as oher American workers, undocumened immigrans in

pracice are no able o execue heir workplace righs, making hem more vul-

nerable o exploiaion.16Given ha in recen hisory, immigraion officials have

conduced enorcemen acions in he inerior o he counry a workplaces or

roadside checkpoins, raher han jus a he border, many undocumened workersare earul o coming orward and ideniying employer wrongdoing.17Similarly,

employers use heir duy o check workers immigraion saus under IRCA as

a ool o deer employmen complains or o realiae agains undocumened

immigrans who file such complains.18Tus, unscrupulous employers are able o

ake advanage o undocumened immigrans wih minimal ear o being caugh or

penalized or heir unlawul employmen pracices.


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As a resul o his ension beween our immigraion and employ-

men laws, researchers have ound ha undocumened immi-

grans are nearly wo imes more likely o be paid below minimum

wage han naive-born workers.19Similarly, a sudy o undocu-

mened workers in Chicago ound ha hese workers were hree

imes more likely han documened immigrans o experiencewage hefsuch as nonpaymen or underpaymen o wages20

and 1.8 imes more likely o work in unsae condiions. 21

Providing a emporary work permi would remove he vulner-

abiliy associaed wih unlawul immigraion saus and dimin-

ish he likelihood o employers exploiing undocumened

workers. Moreover, in he even ha workers are sil l exploied,

hey will be beter posiioned o exer heir workplace righs,

since hey will no be araid ha invoking heir righs will resul

in deporaion. In shor, allowing undocumened immigrans owork legally decreases heir workplace vulnerabiliy, and heir

earnings will likely rise as a resul.

Increasing undocumented immigrants

labor-market mobility

Tere are millions o undocumened immigrans already working

in our economy in a variey o jobs. Teir experience in he labor

marke a large, however, is very differen han ha o legal work-

ers. Since i is illegal or employers o knowingly hire an undocumened immi-

gran, hese workers ofen sel-selec ino jobs ha minimize heir risk o being

deeced as an undocumened immigran and ulimaely depored.22Te resul

is ha undocumened workers requenly find hemselves in low-wage jobs wih

litle opporuniy or upward occupaional mobiliy.23Unlike oher workers in

he labor marke who can maximize heir earnings by finding jobs ha bes mach

heir skills and abiliies, undocumened immigrans canno do his and hereore

ulimaely earn less han hey oherwise could.24

For example, higher levels o educaion generally lead o higher earnings: A per-

son wih a high school degree is likely able o make more money han a person

who has no graduaed rom high school, and so on. Te relaionship beween

educaion and earnings, however, is drasically differen or undocumened

In the United States, labor and employmen

are most effective when everyone covered

these laws are able to execute their rights. S

undocumented workers employment right

therefore, means that all workers are at a gr

risk of being victims of unlawful employme

practices. Most employment investigations

initiated by individual workers filing compl

against their employers. Thus, if undocume

immigrants are not able to report an emplo

legal practices, then all workers who are vic

this wrongdoing are less likely to receive readdition, penalties imposed on employers a

only to correct a specific instance of wrongd

but also to deter other businesses from eng

ing in similar unlawful practices. The likeliho

of other employers engaging in unlawful ac

against American workers, therefore, increa

as the deterrence effect of enforcing labor a

employment laws is weakened by undocum

immigrants inability to file formal complain

Undermining undocumentimmigrants workplace righharms all workers


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immigrans han i is or legal immigrans.25One sudy ound ha legal Mexican

immigrans wage reurns on educaion atainmen were double he reurns

observed by undocumened Mexican immigrans.26

A emporary work permi would give undocumened workers greaer labor-mar-

ke mobiliy, allowing hem o realize he wage poenial o heir skills. Te abiliyo work legally allows undocumened immigrans o access jobs ha value heir

human capial and compensae hem airly or i.


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Estimating the fiscal benefits

of administrative action

I is clear rom he discussion above ha deerred acion would increase payroll

ax revenues, bu by how much?

I Presiden Obama akes adminisraive acion, here are many groups o undocu-

mened immigrans who migh benefi rom deerred acion. For example, he

presiden could exend a deerred acion program o undocumened immigrans

who have been in he Unied Saes or a leas five years, or he could exend he

program o a smaller group, such as undocumened immigrans wih minor chil-dren in he Unied Saes. In he ollowing analysis, CAP esimaes fiscal benefis

i a deerred acion program were available o hree differen groups o undocu-

mened immigrans. (see able 2)

Afer considering he wage effecs o acquiring legal saus and analyzing cur-

ren wage gaps beween undocumened and legal immigrans, i is reasonable o

expec undocumened immigrans wages o increase by abou 8.5 percen under

a deerred acion program. (see he Appendix or a ull discussion o he wage

effecs o deerred acion) Moreover, he analysis assumes ha undocumened

immigrans who receive a work permi would have similar labor-orce paricipaion

and employmen raes as legal, nonciizen immigrans. Finally, since 38 percen o

undocumened immigrans are already paying payroll axes, he analysis assumes

ha he remaining 62 percen o undocumened workers will go on he books or

he firs ime. (see he Appendix or a ull discussion o he mehodology)


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TABLE 2

Fiscal benefits from deferred action

Increase in payroll tax revenues by criteria of eligibility

Number of eligible

undocumented

immigrants,

in millions

Payroll tax gain

in first year,

in billions

Cumulative payroll

tax gains over five

years, in billions


5 years9.95 $6.08 $44.96


10 years7.4 $4.52 $33.44

Undocumented immi-

grants with

a minor child in the

United States

4.7 $2.87 $21.24

Source: Authors calculations. See Methodology.

Tis analysis shows ha he Unied Saes would observe significan increases in

payroll ax revenues i any o hese groups were eligible or work permis under a

deerred acion program. Mos noably, he analysis illusraes ha benefis would

begin accruing immediaely. Wihin he firs year o a program being esablished,

U.S. ax revenues would increase by $6.08 billion, i undocumened immigrans

wih a leas five years o U.S. residency were eligible o apply.27Since no all

eligible individuals will be able o apply and receive a permi wihin he firs year,

he ax gains will coninue o rise as more immigrans receive heir emporary

work permi. Over five years, he benefis would only coninue o grow o an

esimaed oal o $44.96 billion.28


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Similarly, i undocumened immigrans wih minor children in he Unied Saes

were able o apply or deerred acion, ax revenues would increase by an esi-

maed $2.87 billion in he firs year and grow o an esimaed $21.24 billion over

five years.29Tese findings indicae ha he larger he number o undocumened

immigrans who are covered by a deerred acion program, he larger he ax rev-

enue gains will be. Tereore, i would be in he Unied Saes financial ineres oensure ha as many immigrans as possible who are eligible or a deerred acion

program are able o apply and receive work permis as soon as possible.

FIGURE 1

Payroll tax revenue gains from deferred action

First-year increase in payroll tax revenues by number of eligible immigrants

Source: Author's calculations. See Methodology.

Cumulative payroll tax revenue gains over five years by number of eligible undocumented immigrant

$0

$1

$2

$3

$4

$5

$6

$7

4.7 million

undocumented

immigrants with a

minor child in theUnited States

would contribute

$2.87 billion.

1 2 3 4 5 6 7 8 9 10

7.4 million undocumented

immigrants who have lived in the

United States for at least 10 years

would contribute $4.52 billion.


immigrants who have lived

in the United States for at

least five years would

contribute $6.08 billion.

$0

$10

$20

$30

$40

$50

Number of eligible undocumented immigrants, in millions

Payrolltaxcontributions,

inbillions

Cumulativepayrolltaxcontributions,inbillion

s


immigrants who have lived

in the United States for at

least five years would

contribute $44.96 billion.


immigrants who have lived in the

United States for at least 10 years

would contribute $33.44 billion.

4.7 million

undocumented

immigrants with a

minor child in the

United States

would contribute

$21.24 billion.

1 2 3 4 5 6 7 8 9 10

Number of eligible undocumented immigrants, in millions


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Te fiscal benefis o providing deerred acion are significan, bu hey are ar less

han he fiscal and economic benefis o legislaive immigraion reorm. As he

analysis shows, he fiscal benefis o deerred acion sem in par rom he increase

in earnings i would generae or undocumened immigrans. While deerred

acion will lead o an esimaed 8.5 percen increase in wages, anoher CAP sudy

shows ha legislaive reorm ha provides a pahway o ciizenship would resul in

a 25 percen boos in earningsmeaning ax conribuions and economic growh

would be larger.35Te reason why legislaive reorm provides a higher wage

increase is simple: Te permanen naure o his reorm creaes an incenive or

immigrans o inves in heir educaion, which subsequenly raises wages urher.Moreover, researchers have ound ha he acquisiion o ciizenship is associ-

aed wih a 10 percen increase in wages.36Comprehensive reorm ha includes a

pahway o ciizenship will, hereore, urher boos immigraion earnings, leading

o bigger fiscal and economic impacs.

The impact of providing temporary work permits to undocumented

immigrants would not negatively affect American workers job op-

portunities or their wages. While an undocumented immigrant will

have greater access to the labor market and be able to apply for a

wider range of jobs, this will not increase labor-market competition for

native-born workers. This is because undocumented immigrantsde-

spite greater mobility in the labor marketwill not be applying for the

same jobs as native-born workers. For a better understanding of why

providing work permits to undocumented immigrants will not increase

competition for native-born workers, consider the current labor-market

relationship between legal immigrant workers and the native born.

Researchers have long found that immigrants at largenot just un-documented immigrantsand native-born workers do not compete

for the same jobs; instead, they often complement each other in the

workforce as immigrants and native-born workers tend to work in

different industries.30Even when they do work in the same industries,

immigrants and native-born workers often occupy different jobs.31For

example, immigrants make up 31 percent of all workers in the accom-

modation sector,32but these workers are not distributed evenly

jobs within the industry. Instead, the majority of immigrants wo

within only five occupations in the accommodation industry an

percent of all housekeeping jobs in the sector. Conversely, the m

of native-born workers are concentrated in higher skilled jobs a

count for nearly 90 percent of all desk clerks in the industry.33

The experience of the broader, legal immigrant population in

labor force indicates that providing greater labor-market mob

ity to immigrants would not take jobs away from Americans b

instead would allow them to enter jobs that complement the

of native-born workers.

Similarly, undocumented immigrants increase in earnings will

have a negative wage effect on native-born workers. The reaso

is straightforward: As immigrants earn more, they will spend m

leading to greater demand for goods and services and potentia

higher profits for businesses. This will likely result not only in jo

ation but also in higher wages for all workers as the economy g

Impact of deferred action on American workers


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Conclusion

A deerred acion program ha provides boh a emporary reprieve rom depor-

aion and a work permi or millions o undocumened immigrans would offer

much needed relie o American amilies and would mark an imporan sep

oward fixing our broken immigraion sysem. Bu i isn jus immigran amilies

ha would benefi rom his program: All Americans would be beter off as he

program would increase U.S. ax revenues.

Our curren broken immigraion sysem has pushed undocumened work under-ground and resuled in he loss o billions o dollars in payroll axes every year. A

deerred acion program would help fix his problem by allowing undocumened

immigrans o apply or a emporary work permi, work legally, and move reely

around he labor marke o find jobs ha bes sui heir skills. Tis would resul in

more workers being on he books and paying axes, in addiion o earning higher

wages, resuling in a urher boos in payroll ax revenues.

In he firs year o a deerred acion program alone, he Unied Saes sands o

gain $6.08 billion in payroll axes.37While hese gains are significan, hey are ar

less han he fiscal and economic benefis o ull legislaive reorm. A pahway

o ciizenship would provide a greaer increase in undocumened immigrans

earnings and hereore generae a greaer cascade o fiscal and economic benefis.

In ac, he Congressional Budge Office has esimaed ha he Senaes immigra-

ion reorm bill S. 744 would reduce he naions defici by $135 billion over 10

years.38Te analysis in his repor shows ha i is in all Americans bes ineres or

Presiden Obama o esablish an expanded deerred acion program o begin o fix

our broken immigraion sysem.


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About the author

Parick Oakord is a Policy Analys in he Economic and Immigraion Policy

deparmens, where he has helped lead he organizaions analysis on he eco-

nomic and fiscal impacs o immigraion reorm. His research ocuses on issues

relaing o U.S. immigraion policy, he labor orce, and demographic changes inhe Unied Saes. Parick holds an M.Sc. in migraion sudies rom he Universiy

o Oxord and a B.S. in indusrial and labor relaions rom Cornell Universiy.

Prior o joining American Progress, Parick spen ime researching sae-level

immigraion laws and he inersecion o immigraion and employmen law as a

research ellow a Cornell.

Acknowledgment

Te auhor would like o hank Angela Maria Kelley, Marshall Fiz, Rober Lynch,Philip E. Wolgin, and Zach Fields or heir assisance in preparing his repor.


17/26


Appendix

Methodology

Estimating the wage gains of a temporary work permit

In general, he effecs o legalizaion on undocumened immigrans wages are he

uncion o hree hings:

Changes in characerisics and human capial Changes in he reurns on human capial Te removal o discriminaory effec o ones undocumened saus

Under a deerred acion program, one would expec wages o increase due o he

las wo acors: A emporary work permi would increase labor-marke mobiliy

and would remove undocumened immigrans vulnerabiliy o exploiaion. I

should be noed, however, ha a emporary work permi may spur undocumened

immigrans o inves in heir human capial. In his analysis, we do no accoun or

ha effec as here is no a good indicaion o how much invesmen migh occur.

In his repors analysis, CAP assumes ha deerred acion would increase he

undocumened immigrans wages by 8.5 percen. Tis esimae is he midpoin

beween wo differen esimaes o wage increases ha migh occur under a

deerred acion program. While no one can be compleely cerain abou wha

will happen o undocumened immigrans uure earnings, we considered likely

increases under wo approaches:

Hisorical: We can use he experience o immigrans in previous legalizaionprograms o glean wha migh happen o undocumened immigrans earnings

under a deerred acion program.

Curren dispariies: Te curren wage differenials beween undocumened

immigrans and legal immigrans serve as a good indicaion o how much a

workers wages would increase as a resul o receiving a emporary work permi.


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Lessons from the Immigration Reform and Control Act

Te Unied Saes passed he Immigraion Reorm and Conrol Ac, or IRCA,

in 1986, which legalized nearly 3 million undocumened immigrans in he

Unied Saes.39In he years ollowing he enacmen o IRCA, he Unied Saes

conduced an exensive survey o recipiens o legal saus. Trough his survey,

researchers were able o ideniy he wage gains undocumened immigransexperienced afer receiving legal saus. Te Deparmen o Labor esimaed ha

on average, immigrans earnings increased by 15 percen.40Similarly, Rivera-Baiz

ound ha on average, immigrans earnings increased by 17.7 percen. Tis wage

gain, however, is no jus he resul o correcing he negaive consequences o a

workers undocumened saus; i also reflecs undocumened immigrans inves-

mens in heir human capial, such as increasing heir level o educaion.

While a deerred acion program would likely increase undocumened immi-

grans wages, he emporary naure o he program may no creae he same

incenive or undocumened immigrans o inves in heir human capial. Tus,using immigrans wage gains under IRCA as an esimae o he poenial increase

in earnings under a deerred acion program requires isolaing he increase in

wages ha were due o immigrans change in legal saus alone.

Trough he use o a Blinder-Oaxaca wage decomposiion,41researchers have been

able o ideniy which share o he wage increase under IRCA is atribued o immi-

grans change in legal saus and how much is due o changes in human capial and

oher characerisics. Francisco Rivera-Baiz ound ha 40 percen o he observed

wage gain by undocumened immigran under IRCA was due o changes in heir

educaion atainmen, language skills, and oher measurable characerisic, while 60

percen o he boos in earnings canno be explained.42In describing his porion o

he wage gap, Rivera-Baiz wries ha he unexplained wage gains srongly sugges

ha he change in he legal saus o [undocumened] immigrans had a srong

posiive effec on heir earnings.43In oher words, he unexplained porion o he

wage decomposiion can be viewed as a proxy or he increase in earnings due o a

change in legal saus. Tus, under IRCA, undocumened immigrans observed a

10.5 percen wage increase as a resul o acquiring legal saus.

Similar o he immigrans who received legal saus hrough IRCA, undocu-mened immigrans who could apply or deerred acion would be able o shed

he negaive wage effecs o heir unlawul immigraion saus. Tus, Rivera-Baizs

analysis o undocumened immigrans experiences under IRCA provides a good


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esimae o how much he earnings o undocumened immigrans would increase

i hey were eligible or deerred acion. o be sure, some o he unobservable

wage increases in Rivera-Baizs analysis may be due o less easily measurable

changes in characerisics such as healh oucomes. However, he changes ha

occurred as a resul o changes in legal saus under IRCA would likely also occur

under deerred acion as well.

Current wage disparities between undocumented

immigrants and legal immigrants

A second approach o esimaing he wage increase o undocumened immigrans

i hey received a emporary work permi is o ideniy he curren wage penaly

or being undocumened.

Using he American Communiy Survey, or ACS, CAP firs idenified likelyundocumened Mexican immigrans and legal nonciizen Mexican immigrans

hrough an augmened residual mehod.44Specifically, CAP used year o enry,

governmen employee saus, recipien o welare benefis, veeran saus, occupa-

ion, healh insurance coverage, and oher indicaors o ideniy likely undocu-

mened Mexican immigrans in he ACS. CAP hen esimaed ha he wage

gap beween undocumened Mexican immigrans and legal nonciizen Mexican

immigrans is 9.89 percen. CAP conduced a Blinder-Oaxaca wage decomposi-

ion o ideniy which porion o he wage gap is due o difference in measurable

characerisics beween he wo groups. In he analysis, we conrolled or he

ollowing: age, sex, marial saus, number o children, English language abiliies,

educaion atainmen, recen enry ino he Unied Saes, sel-employmen saus,

and average hours o work.

CAP ound ha differences in measurable characerisics can explain 34 percen o

he 9.89 percen wage gap, meaning ha here is a 3.4 percen wage gap beween

undocumened Mexican immigrans and legal nonciizen Mexican immigrans as

a resul o difference in group characerisics.45

Mos imporanly, however, he wage decomposiion illusraed ha 66 percen ohe 9.89 percen wage gap beween he wo groups canno be explained by mea-

surable characerisics. In oher words, here is a 6.5 percen wage gap beween

undocumened Mexican immigrans and legal nonciizen Mexican immigrans due

o reasons no explained by measurable characerisics. Tis 6.5 percen wage gap is


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a reasonable esimae o he negaive wage impac ha undocumened immigrans

experience due o heir legal saus.46Tese findings are consisen wih oher sud-

ies. For example, Mahew Hall and his co-researchers ound ha, when conrolling

or oher characerisics, legal saus was associaed wih a 2.73 percen wage advan-

age or Mexican women and a 7.42 percen wage advanage or Mexican men.47

CAP seleced o use a Blinder-Oaxaca wage decomposiion or wo reason: Firs, o

ensure ha he approach was similar and consisen wih ha used by Rivera-Baiz;

bu more imporanly, because i is a common approach when atemping o quan-

iy he wage impac o discriminaion in he workplace. Similar o discriminaion

based on race or sex, he negaive wage effecs o an undocumened saus are he

resul o discriminaion and or exploiaion by employers on he basis o a workers

immigraion saus. Tereore, he use o a Blinder-Oaxaca wage decomposiion is a

reasonable way o quaniy he negaive wage impac o a workers unlawul saus.

Similar o he conclusions ha can be drawn rom Rivera-Baizs sudy, CAPsanalysis indicaes ha undocumened Mexican immigrans wages will increase

by abou 6.5 percen wih he acquisiion o a emporary work permi, as i would

eliminae he negaive wage effecs associaed wih heir undocumened saus.

Estimating payroll tax contributions

CAP esimaed he increase in payroll ax revenues conribued by undocumened

immigrans and heir employers by ideniying which share o undocumened

immigrans already pay payroll axes, esimaing undocumened immigrans

earnings, and he wage increase ha would resul rom acquiring a emporary

work permi. Te analysis assumes ha 38 percen o undocumened immigrans

already pay axes, meaning ha 62 percen o undocumened immigran would

conribue payroll axes or he firs ime. Using he sample o likely undocu-

mened Mexican immigrans, CAP esimaes ha he average earnings o undocu-

mened workers is $22,029. Te analysis assumes ha earnings o undocumened

immigrans would increase by 8.5 percen. Tis number is he midpoin beween

he wage gains esimaed under he wo approaches discussed above.

Under his analysis, CAP uilized he applicaion raes observed under DACA

and assumes ha similar applicaion raes would occur under a deerred acion

program. Specifically, CAP uilized a 62 percen applicaion rae in he firs year

and raised i o 68 percen by he second year based on DACA. Recognizing ha


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applicaions would be filed over he course o wo years, CAP phased in he acqui-

siion o emporary work permis over he firs wo years, meaning he payroll ax

benefis are also phased in. Moreover, CAP applied he labor-orce paricipaion

rae and unemploymen raes o nonciizen immigrans o he undocumened

populaion under deerred acion.

Literature review

Tere are muliple sudies ha have considered IRCAs effec on he wages o or-

merly undocumened immigrans. A review o he lieraure below is divided ino

sudies ha ideniy he wage impac o legalizaion and wage dispariies beween

undocumened workers and legal workers.

Wage impact of legalization

Department of Labor (1996)

Charged by Congress o invesigae he social and economic characerisics o

undocumened immigrans who were legalized under IRCA, he Deparmen o

Labor, or DOL, released a repor in 1996 ha, in par, idenified wha happened

o he earnings o ormerly undocumened immigrans five years afer legalizaion.

Specifically in his sudy, he DOL compared he earnings o undocumened

immigrans a he ime hey applied or legal saus o heir earnings in 1992. Te

repor ound ha legalized workers earnings rose on average by 15 percen. Te

DOL uilized he Legalized Populaion Survey o make hese esimaes and only

sudied hose immigrans who received legal saus under secion 245A o he

Immigraion and Naionaliy Ac.48

Sherrie A. Kossoudji and Deborah A. Cobb-Clark (2002)

In his sudy, Kossoudji and Cobb-Clark aimed o deermine wheher observed

changes in ormerly undocumened immigrans wages were he resul o he

acquisiion o legal saus or merely changes in he labor marke, which affec

wages. In order o answer his quesion, he auhors compared he changes in

undocumened immigrans earnings in he Legalizaion Populaion Survey, orLPS, o a group o legal workers in he Naional Longiudinal Survey o Youh.

Te auhors firs ound ha legalizaion lead o a change in he wage deermi-

nans o ormerly undocumened immigrans. Specifically, hey ound ha lack o

English language abiliy afer legalizaion led o higher wage penalies. Tey also


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ound ha pos legalizaion, workers received higher reurns on heir educaion

levels, wih he greaes increase on reurns occurring or hose wih higher han

a high school educaion. When aking ino accoun he changes ha occurred o

he wages o he comparison group beween 1986 and 1992, he auhors con-

cluded ha he earnings o undocumened immigrans increased by 6 percen as

a resul o changes in reurns on human capial. Tis esimae does no includeincreases in earnings as a resul o changes in human capial.49

Francisco L. Rivera-Batiz (1999)

As described in he repor above, Rivera-Baiz compared undocumened workers

wages beore legalizaion o heir earnings afer hey acquired legal saus. Rivera-

Baiz uilized he LPS o conduc his analysis. Similar o he DOL sudy, he ound

ha wages o ormerly undocumened men increased by 14.8 percen and he

wages o women increased by 20.6 percen. On average, he ound ha 40 percen

o he wage gains were due o changes in human capial and oher characerisics.50

Wage disparity

Similar o he analysis CAP perormed o ideniy he wage dispariy beween

legal and undocumened immigrans, here are oher sudies ha have compared

he earnings o legal workers o ha o undocumened workers. Te ollowing is a

brie review o he mos recen lieraure.

Sherrie A. Kossoudji and Deborah A. Cobb-Clark (2002)

In addiion o looking a legalizaions impac on earnings, Kossoudji and Cobb-

Clark also idenified he wage gaps beween undocumened and legal workers

prior o legalizaion. Te auhors compared earnings o undocumened immi-

grans as repored in he LPS survey o hose o legal workersboh immigrans

and naivesin he Naional Longiudinal Youh Survey. Te auhors ound

ha i undocumened immigrans had received he wage reurns o legal work-

ers, heir earnings would be 14 percen o 26 percen higher. I should be noed,

however, ha he auhors were comparing undocumened immigrans o boh

legal immigransciizens and nonciizensin addiion o naive-born workers.

Te auhors comparison group is much broader han ha used in CAPs analysis,and hereore he resul rom his sudy is expeced o be larger han ha o CAPs

since boh legal saus and ciizenship are associaed wih higher earnings.51


23/26


Mathew Hall and others (2010)

Tis sudys auhors compared he wage dispariy beween legal Mexican immi-

grans o undocumened Mexican immigrans as repored in he Survey o Income

and Program Paricipaion. Addiionally, he auhors idenified differences in wage

deerminans beween hese wo groups. Similar o Kossoudji and Cobb-Clark,

his sudy also ound ha undocumened workers received lower reurns on heirhuman capial, specifically educaion, han legal immigrans. Wih respec o he

auhors analysis o wage dispariies, hey ound ha afer conrolling or human

capial, undocumened men earned 7.5 percen less han legal immigran men,

and women earned 3.8 percen less han legal immigran women.52


24/26


Endnotes

1 The White House, Remarks by the President on BorderSecurity and Immigration Reform, Press release, June30, 2014, available at http://www.whitehouse.gov/the-press-office/2014/06/30/remarks-president-border-security-and-immigration-reform.

2 U.S. Senate, U.S. Senate Roll Call Votes 113th Congress1st Session, available at http://www.senate.gov/legisla-tive/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=1&vote=00167(last accessed August2014).

3 See Letter from Douglas W. Elmendorf to the Honor-able Patrick J. Leahy, July 3, 2013 available athttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdf.

4 (Legacy) Immigration and Naturalization Service,Operations Instructions, O.I. 103.1(a) (1)(ii) (1975).

5 U.S. Citizenship and Immigration Services, Consider-ation of Deferred Action for Childhood Arrivals (DACA),available at http://www.uscis.gov/humanitarian/consideration-deferred-action-childhood-arrivals-daca(last accessed August 2014).

6 U.S. Citizenship and Immigration Services, Data Set:Deferred Action for Childhood Arrivals, available athttp://www.uscis.gov/tools/reports-studies/immigra-tion-forms-data/data-set-deferred-action-childhood-arrivals(last accessed August 2014).

7 The Social Security Administration estimates that 3million undocumented immigrants contribute payrolltaxes. This suggests that of the 8 million undocument-ed immigrants who are working in the United States,38 percent are paying payroll taxes. Stephen Gossand others, Effects of Unauthorized Immigration onthe Actuarial Status of the Social Security Trust Funds(Baltimore: Social Security Administration, 2013),available at http://www.socialsecurity.gov/oact/NOTES/pdf_notes/note151.pdf;Pew estimates that there are8 million undocumented workers. Jeffrey S. Passel andDVera Cohn, Unauthorized Immigrant Population:

National and State Trends, 2010 (Washington: PewResearch Hispanic Trends Project, 2011), available athttp://www.pewhispanic.org/2011/02/01/v-workers/.

8 Under the Immigration Reform and Control Act, it is un-lawful for employers to knowingly hire undocumentedimmigrants (8 USC Sec 1324 a). Despite this prohibition,many undocumented immigrants have found work,but given their unlawful status, they do not have a validSocial Security card and therefore cannot file payrolltaxes. It should be noted, however, that self-employedundocumented immigrants can file payroll taxes byutilizing an I ndividual Tax Identification Number. SeeSocial Security Administration, Self-Employment Tax(Social Security and Medicare Tax), available athttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxes(last accessed August 2014).

9 Passel and Cohn, Unauthorized Immigrant Population:National and State Trends, 2010.

10 Social Security Administration, Social Security Num-bers for Noncitizens (2013), available at http://www.ssa.gov/pubs/EN-05-10096.pdf.Again, it should benoted that self-employed undocumented immigrantsare able to file payroll taxes through the use of an In-dividual Tax Identification Number. See Social SecurityAdministration, Self-Employment Tax (Social Securityand Medicare Tax).

11 Goss and others, Effects of Unauthorized Immigra-tion on the Actuarial Status of the Social Security TrustFunds.

12 Ibid.

13 National Immigration Law Center, Frequently AskedQuestions: DACA and Your Workplace Rights (2014).

14 It should be noted that there is a limit on the amountof earnings that are subject to payroll taxes. In 2014,the cap on earnings that can be taxed was $117,000.See Social Security Administration Contributions andBenefit Base, available athttp://www.ssa.gov/oact/cola/cbb.html(last accessed August 2014).

15 In the United States, most labor and employment laws,such as the Fair Labor Standards Act or the NationalLabor Relations Act, cover any worker who is an em-ployee. In Rutherford Food Corp v. McComb (331 U.S.722), the Supreme Court ruled that when determiningwhether or not a worker qualifies as an employee,courts need only consider the day-to-day interactionbetween the worker and the employer. Thus, a workersimmigration status has no bearing on whether or not

they are an employee under U.S. labor and employ-ment laws. For a complete discussion of undocument-ed immigrants protections under U.S. employmentand labor law, see Kati Griffith, U.S. Migrant WorkerLaw: The Interstices of Immigration Law and Labor andEmployment Law, Comparative Labor Law and PolicyJournal125 (31) (2009).

16 Adriana Kugler and Patrick Oakford, ComprehensiveImmigration Reform Will Benefit American Workers(Washington: Center for American Progress, 2013),available at http://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehen-sive-immigration-reform-will-benefit-american-work-ers/.

17 Shannon Gleeson, Labor Rights for All? The Role ofUndocumented Immigrant Status for Worker ClaimsMaking, Law and Social Inquiry35 (3) (2010): 561602,

available at http://onlinelibrary.wiley.com/doi/10.1111/j.1747-4469.2010.01196.x/abstract.

18 For a discussion on how employers use their immigra-tion duties to stifle workers employment rights, seeKugler and Oakford, Comprehensive Immigrationreform Will Benefit American Workers.

19 Annette Bernhardt and others, Broken Laws,Unprotected Workers: Violations of Employment andLabor Laws in Americas Cities (Washington: NationalEmployment Law Project, 2010), available at http://www.unprotectedworkers.org/index.php/broken_laws/index.

20 Chirag Mehta and others, Chicagos UndocumentedImmigrants: An analysis of Wages, Working Condition,and Economic Contributions (Chicago: Center for Ur-ban Economic Development, 2002), available at http://

www.williamperezphd.com/articles/mehta-theodore-mora-wade-2002.pdf.

21 Ibid.

22 Sherrie A. Kossoudji and Deborah A. Cobb-Clark, Com-ing out of the Shadows: Learning about Legal Statusand Wages from the Legalized Population, Journal ofLabor Economics 20 (3) (2002): 598628.
http://www.whitehouse.gov/the-press-office/2014/06/30/remarks-president-border-security-and-immigration-reformhttp://www.whitehouse.gov/the-press-office/2014/06/30/remarks-president-border-security-and-immigration-reformhttp://www.whitehouse.gov/the-press-office/2014/06/30/remarks-president-border-security-and-immigration-reformhttp://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=1&vote=00167http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=1&vote=00167http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=1&vote=00167http://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.uscis.gov/humanitarian/consideration-deferred-action-childhood-arrivals-dacahttp://www.uscis.gov/humanitarian/consideration-deferred-action-childhood-arrivals-dacahttp://www.uscis.gov/tools/reports-studies/immigration-forms-data/data-set-deferred-action-childhood-arrivalshttp://www.uscis.gov/tools/reports-studies/immigration-forms-data/data-set-deferred-action-childhood-arrivalshttp://www.uscis.gov/tools/reports-studies/immigration-forms-data/data-set-deferred-action-childhood-arrivalshttp://www.socialsecurity.gov/oact/NOTES/pdf_notes/note151.pdfhttp://www.socialsecurity.gov/oact/NOTES/pdf_notes/note151.pdfhttp://www.pewhispanic.org/2011/02/01/v-workers/http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxeshttp://www.ssa.gov/pubs/EN-05-10096.pdfhttp://www.ssa.gov/pubs/EN-05-10096.pdfhttp://www.ssa.gov/oact/cola/cbb.htmlhttp://www.ssa.gov/oact/cola/cbb.htmlhttp://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehensive-immigration-reform-will-benefit-american-workers/http://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehensive-immigration-reform-will-benefit-american-workers/http://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehensive-immigration-reform-will-benefit-american-workers/http://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehensive-immigration-reform-will-benefit-american-workers/http://onlinelibrary.wiley.com/doi/10.1111/j.1747-4469.2010.01196.x/abstracthttp://onlinelibrary.wiley.com/doi/10.1111/j.1747-4469.2010.01196.x/abstracthttp://www.unprotectedworkers.org/index.php/broken_laws/indexhttp://www.unprotectedworkers.org/index.php/broken_laws/indexhttp://www.unprotectedworkers.org/index.php/broken_laws/indexhttp://www.williamperezphd.com/articles/mehta-theodore-mora-wade-2002.pdfhttp://www.williamperezphd.com/articles/mehta-theodore-mora-wade-2002.pdfhttp://www.williamperezphd.com/articles/mehta-theodore-mora-wade-2002.pdfhttp://www.williamperezphd.com/articles/mehta-theodore-mora-wade-2002.pdfhttp://www.williamperezphd.com/articles/mehta-theodore-mora-wade-2002.pdfhttp://www.williamperezphd.com/articles/mehta-theodore-mora-wade-2002.pdfhttp://www.unprotectedworkers.org/index.php/broken_laws/indexhttp://www.unprotectedworkers.org/index.php/broken_laws/indexhttp://www.unprotectedworkers.org/index.php/broken_laws/indexhttp://onlinelibrary.wiley.com/doi/10.1111/j.1747-4469.2010.01196.x/abstracthttp://onlinelibrary.wiley.com/doi/10.1111/j.1747-4469.2010.01196.x/abstracthttp://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehensive-immigration-reform-will-benefit-american-workers/http://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehensive-immigration-reform-will-benefit-american-workers/http://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehensive-immigration-reform-will-benefit-american-workers/http://www.americanprogress.org/issues/immigration/report/2013/09/12/74014/comprehensive-immigration-reform-will-benefit-american-workers/http://www.ssa.gov/oact/cola/cbb.htmlhttp://www.ssa.gov/oact/cola/cbb.htmlhttp://www.ssa.gov/pubs/EN-05-10096.pdfhttp://www.ssa.gov/pubs/EN-05-10096.pdfhttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxeshttp://www.pewhispanic.org/2011/02/01/v-workers/http://www.socialsecurity.gov/oact/NOTES/pdf_notes/note151.pdfhttp://www.socialsecurity.gov/oact/NOTES/pdf_notes/note151.pdfhttp://www.uscis.gov/tools/reports-studies/immigration-forms-data/data-set-deferred-action-childhood-arrivalshttp://www.uscis.gov/tools/reports-studies/immigration-forms-data/data-set-deferred-action-childhood-arrivalshttp://www.uscis.gov/tools/reports-studies/immigration-forms-data/data-set-deferred-action-childhood-arrivalshttp://www.uscis.gov/humanitarian/consideration-deferred-action-childhood-arrivals-dacahttp://www.uscis.gov/humanitarian/consideration-deferred-action-childhood-arrivals-dacahttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=1&vote=00167http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=1&vote=00167http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=1&vote=00167http://www.whitehouse.gov/the-press-office/2014/06/30/remarks-president-border-security-and-immigration-reformhttp://www.whitehouse.gov/the-press-office/2014/06/30/remarks-president-border-security-and-immigration-reformhttp://www.whitehouse.gov/the-press-office/2014/06/30/remarks-president-border-security-and-immigration-reform


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23 For a discussion of wage mobility of undocumentedimmigrants and a review of literature on the oc-cupational mobility of undocumented immigrants,see Marta Tienda and Audrey Singer Wage Mobilityof Undocumented Workers in the United States, Inter-national Migration Review 29 (1) (1995): 112138. Fora breakdown of which industries undocumented im-migrants work in see, Jeffrey S. Passel and D Vera Cohn,A Portrait of Unauthorized Immigrants in the UnitedStates (Washington: Pew Hispanic Center, 2009).

24 Kossoudji and Cobb-Clark estimate that if undocu-

mented immigrants had the same return on humancapital as legal immigrants, their earnings would be 14percent higher. See Kossoudji and Cobb-Clark, Comingout of the Shadows.

25 Matthew Hall, Emily Greenman, and George Farkas,Legal Status and Wage Disparities for Mexican Immi-grants, Social Forces89 (2) (2010): 491513, available athttp://muse.jhu.edu/journals/social_forces/summary/v089/89.2.hall.html.

26 Ibid.

27 Authors calculations. See Appendix for full methodol-ogy.

28 Authors calculations. See the Appendix for full meth-odology.

29 Authors calculations. See the Appendix for full meth-odology.

30 Gianmarco Ottaviano and Giovanni Peri, Rethink-ing the Effect of Immigration on Wages, Journal ofthe European Economic Association 10 (1) (2012):152197, available athttp://onlinelibrary.wiley.com/doi/10.1111/j.1542-4774.2011.01052.x/abstract.In thispiece, the authors not only estimate the wage impactof immigrants on native-born workers but also identifythat immigrants and natives are imperfect substitutes.

31 Audrey Singer, Immigrant Workers in the U.S. LaborForce (Washington: The Brookings Institution, 2012),available at http://www.brookings.edu/~/media/re-search/files/papers/2012/3/15%20immigrant%20work-ers%20singer/0315_immigrant_workers_singer.pdf.

32 Ibid.

33 Ibid.

34 For a review of the literature on the impact of im-migrants on the wages of native-born workers, seeHeidi Shierholz Immigration and Wages: Methodologi-cal advancements confirm modest gains for nativeworkers (Washington: Economic Policy Institute, 2010).Shierholz also found in this study, through an originalanalysis, that native-born workers had a slight increasein earnings as a result of immigration.

35 Robert Lynch and Patrick Oakford, The EconomicEffects of Granting Legal Status and Citizenship toUndocumented Immigrants (Washington: Centerfor American Progress, 2013), available athttp://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocument-

ed-immigrants/.

36 Ibid. Other researchers have found a similar increasein earnings with the acquisition of citizenship. For ex-ample, Heidi Shierholz found that naturalized citizenshad family incomes that were 15 percent higher that ofnoncitizen immigrants. Heidi Shierholz, The Effects ofCitizenship on Family Income and Poverty (Washing-ton: Economic Policy Institute, 2010).

37 Authors calculations. See the Appendix for full meth-odology

38 Congressional Budget Office, Senate Bill 744, Esti-

mated Impact on the Federal Budget for 2014 through2023 (2013), available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdf.

39 U.S. Department of Labor, Characteristics and Labormarket Behavior of the Legalized Population Five YearsFollowing Legalization (1996).

40 U.S. Department of Labor, Characteristics and Labormarket Behavior of the Legalized Population Five YearsFollowing Legalization (1996).

41 For more information on the Blinder-Oaxaca wagedecomposition, see Ben Jann, The Blinder-Oaxacadecomposition for linear regression models, The StataJournal 8 (4) (2008): 453479, available at http://age-consearch.umn.edu/bitstream/122615/2/sjart_st0151.pdf.

42 Francisco L Rivera-Batiz, Undocumented workers in thelabor market: An analysis of the earning of legal and il-legal Mexican immigrants in the United States,Journalof Population Economics12 (2) (1999): 91116, availableat http://www.jstor.org/discover/10.2307/20007616?uid=3739584&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21104585315823.

43 Ibid.

44 Bureau of the Census,American Community Survey,2012 (U.S. Department of Commerce, 2012).

45 Authors calculations based on 2012 American Com-munity Survey.

46 Ibid.

47 Hall, Greenman, and Farkas, Legal Status and Wage

Disparities for Mexican Immigrants.

48 U.S. Department of Labor,Effects of the ImmigrationReform and Control Act: Characteristics and Labor MarketBehavior of the Legalized Population Five Years followingLegalization (1996).

49 Kossoudji and Cobb-Clark, Coming out of the Shad-ows.

50 Rivera-Batiz, Undocumented workers in the labormarket.

51 Kossoudji and Cobb-Clark Coming out of the Shad-ows.

52 Hall, Greenman, and Farkas, Legal Status and WageDisparities for Mexican Immigrants.
http://muse.jhu.edu/journals/social_forces/summary/v089/89.2.hall.htmlhttp://muse.jhu.edu/journals/social_forces/summary/v089/89.2.hall.htmlhttp://onlinelibrary.wiley.com/doi/10.1111/j.1542-4774.2011.01052.x/abstracthttp://onlinelibrary.wiley.com/doi/10.1111/j.1542-4774.2011.01052.x/abstracthttp://www.brookings.edu/~/media/research/files/papers/2012/3/15%20immigrant%20workers%20singer/0315_immigrant_workers_singer.pdfhttp://www.brookings.edu/~/media/research/files/papers/2012/3/15%20immigrant%20workers%20singer/0315_immigrant_workers_singer.pdfhttp://www.brookings.edu/~/media/research/files/papers/2012/3/15%20immigrant%20workers%20singer/0315_immigrant_workers_singer.pdfhttp://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://ageconsearch.umn.edu/bitstream/122615/2/sjart_st0151.pdfhttp://ageconsearch.umn.edu/bitstream/122615/2/sjart_st0151.pdfhttp://ageconsearch.umn.edu/bitstream/122615/2/sjart_st0151.pdfhttp://www.jstor.org/discover/10.2307/20007616?uid=3739584&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21104585315823http://www.jstor.org/discover/10.2307/20007616?uid=3739584&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21104585315823http://www.jstor.org/discover/10.2307/20007616?uid=3739584&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21104585315823http://www.jstor.org/discover/10.2307/20007616?uid=3739584&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21104585315823http://www.jstor.org/discover/10.2307/20007616?uid=3739584&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21104585315823http://www.jstor.org/discover/10.2307/20007616?uid=3739584&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21104585315823http://ageconsearch.umn.edu/bitstream/122615/2/sjart_st0151.pdfhttp://ageconsearch.umn.edu/bitstream/122615/2/sjart_st0151.pdfhttp://ageconsearch.umn.edu/bitstream/122615/2/sjart_st0151.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/s744aspassed.pdfhttp://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.americanprogress.org/issues/immigration/report/2013/03/20/57351/the-economic-effects-of-granting-legal-status-and-citizenship-to-undocumented-immigrants/http://www.brookings.edu/~/media/research/files/papers/2012/3/15%20immigrant%20workers%20singer/0315_immigrant_workers_singer.pdfhttp://www.brookings.edu/~/media/research/files/papers/2012/3/15%20immigrant%20workers%20singer/0315_immigrant_workers_singer.pdfhttp://www.brookings.edu/~/media/research/files/papers/2012/3/15%20immigrant%20workers%20singer/0315_immigrant_workers_singer.pdfhttp://onlinelibrary.wiley.com/doi/10.1111/j.1542-4774.2011.01052.x/abstracthttp://onlinelibrary.wiley.com/doi/10.1111/j.1542-4774.2011.01052.x/abstracthttp://muse.jhu.edu/journals/social_forces/summary/v089/89.2.hall.htmlhttp://muse.jhu.edu/journals/social_forces/summary/v089/89.2.hall.html


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Administrative Action on Immigration Reform