Does Employing Undocumented Workers Give Firms a Competitive Advantage?

13 Pages Posted: 14 Feb 2013

See all articles by J. David Brown

J. David Brown

IZA Institute of Labor Economics

Julie L. Hotchkiss

Federal Reserve Bank of Atlanta; Georgia State University - Department of Economics

Myriam Quispe‐Agnoli

Mercer University

Date Written: February 2013

Abstract

Using administrative data from the state of Georgia, this paper finds that, on average, across all firms, employing undocumented workers reduces a firm's hazard of exit by 19 percent. The advantage to firms from employing undocumented workers increases as more firms in the industry do so, 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.

Suggested Citation

Brown, J. David and Hotchkiss, Julie L. and Quispe‐Agnoli, Myriam, Does Employing Undocumented Workers Give Firms a Competitive Advantage? (February 2013). Journal of Regional Science, Vol. 53, Issue 1, pp. 158-170, 2013. Available at SSRN: https://ssrn.com/abstract=2217294 or http://dx.doi.org/10.1111/jors.12009

J. David Brown (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Julie L. Hotchkiss

Federal Reserve Bank of Atlanta ( email )

Research Department
1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8198 (Phone)
404-498-8058 (Fax)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Myriam Quispe‐Agnoli

Mercer University

1400 Coleman Avenue
Atlanta, GA 30341-4155
United States

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