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Atlanta Fed Working Papers


The Labor Market Experience and Impact of Undocumented Workers

Julie L. Hotchkiss and Myriam Quispe-Agnoli
Working Paper 2008-7c
Revised June 2008

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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.

Please address questions regarding content to Julie 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, or Myriam Quispe-Agnoli, Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street, N.E., Atlanta, GA 30309-4470, 404-498-8930, myriam.quispe-agnoli@atl.frb.org.

For further information, contact the Public Affairs Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street, N.E., Atlanta, Georgia 30309-4470, 404-498-8020.