Working Paper: NBER ID: w31457
Authors: George J. Borjas; Anthony Edo
Abstract: In May 1981, President François Mitterrand regularized the status of undocumented immigrant workers in France. The newly legalized immigrants represented 12 percent of the non-French workforce and about 1 percent of all workers. Employers have monopsony power over undocumented workers because the undocumented may find it costly to participate in the open labor market and have restricted economic opportunities. By alleviating this labor market imperfection, a regularization program can move the market closer to the efficient competitive equilibrium and potentially increase employment and wages for both the newly legalized and the authorized workforce. Our empirical analysis reveals that the Mitterrand regularization program particularly increased employment and wages for low-skill native and immigrant men, and raised French GDP by over 1 percent.
Keywords: monopsony; undocumented immigrants; labor market efficiency; regularization
JEL Codes: D43; J31; J42; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Mitterrand regularization program (J68) | employment rate of low-skilled French men in Paris (J68) |
| Mitterrand regularization program (J68) | wages of low-skilled French men (J31) |
| Mitterrand regularization program (J68) | French GDP (E20) |
| reduction of monopsony power in undocumented labor market (J42) | employment of undocumented workers (K37) |
| employment of undocumented workers (K37) | employment of authorized workers (J68) |