Employment of Undocumented Immigrants and the Prospect of Legal Status: Evidence from an Amnesty Program

This article estimates the causal effect of the prospect of legal status on the employment outcomes of undocumented immigrants. The identification strategy exploits a natural experiment provided by an Italian amnesty program that introduced an exogenous discontinuity in eligibility based on date of arrival. The authors find that immigrants who are potentially eligible for legal status under the amnesty program have a significantly higher probability of being employed relative to undocumented immigrants who are not eligible. The size of the estimated effect is equivalent to about half the increase in employment that undocumented immigrants in our sample normally experience during their first year in Italy. These findings are robust to several checks and falsification exercises.