The wage impacts of intensified immigration enforcement on native and immigrant workers

ABSTRACT

We examine the heterogeneous wage effects of E-Verify adoption on natives and immigrants by industry and skill level using a Difference-in-Differences model. The results suggest that immigrant workers in low-skilled occupations (e.g. manual laborer, low-skill services, and craft workers) in the manual industry experience a decrease in wages after E-Verify adoption, while immigrant workers who are high school graduates and those that have clerical and sales positions in the service and retail trade industries experience a wage increase. We find insignificant changes in the wage level of native workers of all skill levels. E-Verify did not effectively improve the wage level of native workers because the impacts seem to be absorbed by immigrant workers.

KEYWORDS:

• E-Verify
• wage
• native workers
• skill
• immigrant workers

JEL CLASSIFICATION:

• J31
• J61
• J15

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/00036846.2022.2075539.

Notes

¹ Ideally longitudinal data are needed to test for displacement effects. If there was a proportional inflow of low-skilled and high-skilled natives into E-Verify states, this ratio would not change but labor supply of low-skilled and high-skilled workers in those states would change, and this could have consequences on wage levels. However, as undocumented immigrants are generally low-skilled, it is highly unlikely that high skilled natives would move to non-E-Verify states at rates similar to low skilled natives. Dustmann, Schönberg, and Stuhler (2017) provide an excellent discussion on why studies on immigration effects on wages provide different results and point out potential biases. In addition, Card and DiNardo (2000) examine the effects of immigrant inflows on the natives and suggest that “the local labor market impacts of unskilled immigration are mitigated by other avenues of adjustment, such as endogenous shifts in industry structure, rather than by rapid adjustments in the native population.”