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Atlanta Fed Working Papers


The Wage Impact of Undocumented Workers

Julie L. Hotchkiss, Myriam Quispe-Agnoli, and Fernando Rios-Avila
Working Paper 2012-4
March 2012

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Using administrative, individual-level, longitudinal data from the state of Georgia, this paper finds that a documented worker employed by a firm that hires undocumented workers can expect to earn 0.15 percent less than if employed by a firm that does not hire undocumented workers. However, in sectors where there are opportunities for task specialization and benefits from communication skills, documented workers can expect to earn a wage premium of less than 1 percent from being employed at a firm that also hires undocumented workers.

JEL classification: J30, J15

Key words: illegal immigrants, immigration, unauthorized immigration


The paper has benefited from comments and suggestions from George Borjas, J. David Brown, Curtis Florence, Jerry Gonzalez, Gordon Hanson, Robert E. Moore, Pia Orrenius, Giovanni Peri, Debra Sabia, Eric Seiber, Chad Sparber, Madeline Zavodny, and seminar participants at the Departments of Economics at the Georgia Institute of Technology, the University of Kentucky, the University of Georgia Department of Public Administration and Policy, Claremont-McKenna College, and the University of California-Riverside. The research assistance of Gustavo Canavire, M. Laurel Graefe, Gustavo Uceda, and Eric Wang is much appreciated. The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.

Please address questions regarding content to Julie L. Hotchkiss (contact author), Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street, N.E., Atlanta, GA 30309-4470, 404-498-8198, julie.l.hotchkiss@atl.frb.org; Myriam Quispe-Agnoli, Community and Economic Development, Federal Reserve Bank of Atlanta, 1000 Peachtree Street, N.E., Atlanta, GA 30309-4470, 404-498-8930, myriam.quispe-agnoli@atl.frb.org; or Fernando Rios-Avila, Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street, N.E., Atlanta, GA 30309-4470, 404-498-7995, fernando.rios@atl.frb.org.

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