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The Differential Wage Impact of the Immigration Reform and Control Act on Latino Ethnic Subgroups

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Abstract:

Objective.

This article tests whether employer sanctions for hiring undocumented workers, a provision of the 1986 Immigration Reform and Control Act (IRCA), adversely affected the hourly earnings of Latino workers. Methods.

Using the Current Population Survey Outgoing Rotation Group Files from 1983–1990, a natural experiment framework is developed to assess the differential wage impact of employer sanctions on Latino ethnic subgroups. Results.

Estimates of wage changes indicate that workers of Mexican descent saw a sizeable pre-post IRCA decline in their hourly earnings relative to Cuban or Puerto Rican workers. Moreover, this change in wages is not observed among non-Latino white workers. Controlling for the level of enforcement explains part of this decline immediately following the passage of IRCA, and enforcement efforts continue to be a significant factor several years later. Conclusions.

The majority of evidence is consistent with the contention that employer sanctions adversely affected the earnings of Mexican workers.

Document Type: Research Article

DOI: http://dx.doi.org/10.1111/j.0038-4941.2005.00346.x

Affiliations: San Diego State University

Publication date: December 1, 2005

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