Da. Cobbclark et al., IMMIGRATION REFORM - THE EFFECTS OF EMPLOYER SANCTIONS AND LEGALIZATION ON WAGES, Journal of labor economics, 13(3), 1995, pp. 472-498
The Immigration Reform and Control Act of 1986 (IRCA) represents an at
tempt to use labor market regulation to control illegal migration into
the United States by imposing fines on employers who hire unauthorize
d workers. Sanctions lower wages directly because they act as a tax on
hiring additional workers. In addition, IRCA legalized many longtime
illegal aliens. Legalization affects wages by changing the relative su
pply of authorized and unauthorized workers, This study estimates IRCA
's impact on wages of manufacturing production workers in metropolitan
areas and finds small but statistically significant effects: sanction
s lower wages, while legalization raises them.