Using administrative data from the state of Georgia, the authors find that average wages among documented workers are lower in industries that employ undocumented workers and that a greater share of undocumented workers in those industries further lowers wages. In addition, undocumented workers have significantly lower labor supply elasticity, likely as a result of their limited employment and grievance opportunities. Furthermore, the inflow of undocumented workers does more to displace earlier hired undocumented workers than it does to displace documented workers.
JEL classification: J61, J31, J42, F22
Key words: immigration, wage impact, worker displacement
The authors gratefully acknowledge M. Laurel Graefe and Gustavo Uceda for research assistance. They also thank Jerry Gonzalez and the seminar participants in the Georgia Institute of Technology Department of Economics and in the University of Georgia Department of Public Administration and Policy for helpful comments. 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.
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