Working Paper: NBER ID: w24872
Authors: Elizabeth U. Cascio; Ethan G. Lewis
Abstract: We explore how permanent residency affects personal income tax participation and net personal income tax payments using variation from the Immigration Reform and Control Act of 1986 (IRCA), which authorized the largest U.S. amnesty to date. We exploit the timing and geographic unevenness of IRCA’s legalization programs alongside newly digitized data on personal income taxes in California, home to the majority of applicants. Green Cards induced the previously unauthorized to file state income tax returns at rates comparable to other California residents. While the new returns generated little additional revenue through the end of the 1990s, they did raise the incomes of families with children through new claims of the federal Earned Income Tax Credit.
Keywords: immigration reform; green cards; personal income taxes; EITC
JEL Codes: H24; H53; H71; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| green card distribution (K37) | personal income tax participation (H24) |
| green card distribution (K37) | net payments (G35) |
| green card distribution (K37) | tax filing behavior (H26) |
| green card distribution (K37) | EITC claims (H26) |
| green card distribution (K37) | upward income mobility (J62) |
| green card distribution (K37) | increasing tax contributions (H29) |