Tuesday, October 27, 2015

Do E-verify mandates improve labor market outcomes of low-skilled native and legal immigrant workers?

This study examines examine the impact of the 2007 Legal Arizona Workers Act (LAWA) on employment outcomes of low-skilled legal workers. The Act requires employers in the state to use the federal E-Verify database to determine whether a prospective employee is authorized to work.  This law was upheld by the Supreme Court in Chamber of Commerce v. Whiting  (2011).  

The results of the study suggest that contrary to its intent, LAWA does not appear to have improved labor market outcomes of legal low-skilled workers who compete with unauthorized immigrants, the target of the legislation. In fact, the study finds some evidence of diminished employment and increased unemployment among legal low-skilled workers in Arizona. These findings are concentrated on the largest demographic group of workers—non-Hispanic white men. While they are less likely to find employment, those who do have on average higher earnings as a result of LAWA. The pattern of results points to both labor supply and labor demand contractions due to LAWA, with labor supply dominating in terms of magnitude.

The authors of the study are Sarah Bohn (Public Policy Institute of California), Magnus Lofstrom (Public Policy Institute of California; Institute for the Study of Labor (IZA)), and Steven Raphael (University of California, Berkeley - The Richard & Rhoda Goldman School of Public Policy).  It is downloadable here and here and was published in the Southern Economic Journal.



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