The Impact of Amnesty on Labor Market Outcomes: A Panel Study Using the Legalized Population Survey

This paper tests whether amnesty, a provision of the 1986 Immigration Reform and Control Act (IRCA), affected the labor market outcomes of the legalized population. Using the Legalized Population Survey (LPS) and the National Longitudinal Survey of Youth (NLSY79) from 1987-1992, a quasi-experimental framework is developed to assess the differential impact of amnesty on the legalized population relative to a comparison group. After the implementation of the amnesty program, employment fell and unemployment rose for newly legalized men relative to the comparison group of already legal U.S. residents. For women, employment also fell and transitions out of the workforce increased among the newly legalized population. Increasing returns to skill, as captured by English proficiency, only played an important role in explaining the employment of newly legalized women. Finally, newly legalized men and women enjoyed higher wage growth rates than their working native counterparts, perhaps owing to their comparatively growing returns to U.S. educational attainment over this period.