Assessing the Labor Market Effects

S u m m a r y N early 12 million unauthorized immigrants live in the United States. California is home to about 2.7 million of these immigrants, who make up almost 10 percent of the state's labor force. 1 Currently, legislators in Washington, D.C., are considering a comprehensive reform of federal immigration policies that could include the legalization of unauthorized immigrants. Many observers believe that a legalization program could have a significant economic impact. Our research suggests otherwise. This report finds that legalizing most currently unauthorized immigrants would not lead to dramatic changes in the labor market, either for unauthorized immigrants or for native workers. We also find little evidence to support the view that such a step would have significant effects on the broader economy, particularly on tax revenues or public assistance programs. Specifically, we find that legalization is not likely to increase the occupational mobility or wages of most unauthorized immigrants, at least in the short run. This is especially true for low-skill workers, for whom any improvement is likely to be small at best. For immigrants who cross the border without documentation, employment outcomes do improve over time, but none of this progress is attributable to gaining legal status. For those who gain legal status after overstaying a temporary visa, the outlook is slightly better. In these cases, we do see some upward occupational mobility that may be related to acquiring legal status. However, this mobility is specifically attributable to skill level: Highly AP Photo/SilvAnA XimenA