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Does Employing Undocumented Workers Give Firms a Competitive Advantage?David BrownHeriot-Watt University - Centre for Economic Reform and Transformation (CERT) Julie L. HotchkissFederal Reserve Bank of Atlanta; Georgia State University - Department of Economics Myriam Quispe-AgnoliFederal Reserve Bank of Atlanta February 2012 FRB Atlanta Working Paper Series No. 2012-02 Abstract: Using administrative data from the state of Georgia, this paper finds that on average, among all firms, employing undocumented workers reduces a firm's hazard of exit by 19 percent. However, the impact varies greatly across sectors. In addition, a firm is at a distinct disadvantage if it does not employ undocumented workers but its rivals do. The advantage to employing undocumented workers increases as more firms in the industry do so. In addition, the advantage to a firm from employing undocumented workers decreases with the skill level of the firm's workers, increases with the breadth of a firm's market, and increases with the labor intensity of the firm's production process.
Number of Pages in PDF File: 60 Keywords: firm survival, illegal immigrants, hazard rates, survival analysis JEL Classification: J15, C41, J42 working papers seriesDate posted: May 16, 2012Suggested CitationContact Information
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