States Taking the Reins? Employment Verification Requirements and Local Labor Market Outcomes

73 Pages Posted: 22 Jan 2020 Last revised: 21 Nov 2024

See all articles by Shalise Ayromloo

Shalise Ayromloo

U.S. Census Bureau

Benjamin Feigenberg

Massachusetts Institute of Technology (MIT) - Department of Economics

Darren H. Lubotsky

University of Illinois at Chicago

Date Written: January 2020

Abstract

We estimate the impact of state-level “E-Verify” legislation that mandates employment eligibility verification for private-sector workers. We document declines in formal sector employment and employment turnover after mandate passage, with effects concentrated among those likeliest to be work-ineligible. Using newly available data, we show that larger firms are far more likely to comply with mandates. Heterogeneity in adherence leads to substantial within-state employment spillovers from larger to smaller firms, as well as a reduction in the number of large firms. We find no evidence that work-ineligible populations relocate or that native-born workers’ labor market outcomes improve in response to mandates.

Suggested Citation

Ayromloo, Shalise and Feigenberg, Benjamin and Lubotsky, Darren H., States Taking the Reins? Employment Verification Requirements and Local Labor Market Outcomes (January 2020). NBER Working Paper No. w26676, Available at SSRN: https://ssrn.com/abstract=3522325

Shalise Ayromloo (Contact Author)

U.S. Census Bureau

4600 Silver Hill Road
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Benjamin Feigenberg

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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E52-391
Cambridge, MA 02142
United States

Darren H. Lubotsky

University of Illinois at Chicago ( email )

University Hall Room 724
Chicago, IL 60607
United States

HOME PAGE: http://lubotsky.people.uic.edu/

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