Observations on Regularization and the Labor Market Performance of Unauthorized and Regularized Immigrants

The regularization, or legalization, of unauthorized immigrants has become a central, if controversial, policy tool in many developed countries’ struggle to manage irregular immigration. Because of the sheer size of irregular immigration in the advanced industrial world, regularization programs have become a significant source of legal workers and, in many instances, of prospective citizens. Thus, the labor market and broader effects of such policies are of critical importance. If regularizations can be shown to lead to productivity gains, increase employment, or shift production from the informal to the formal sector, they become relatively more attractive policy tools. Mindful that many policy decisions often must be (and are) made on the basis of incomplete and even speculative information, this essay will focus on how context and program design and implementation affect regularization outcomes.

Unfortunately, little that is definitive is known about the labor market effects of regularization programs. In part, this is the result of severe knowledge gaps about irregular immigration itself. The size of clandestine immigration is difficult to estimate with much confidence under the best of circumstances due to the underground nature of the activity itself. Knowing the unauthorized immigrant population’s demographic and human capital characteristics is equally difficult—at least beyond the information provided by a few case studies.

This paper thus will be by necessity speculative in its attempt to fill some of the analytical and interpretative voids with limited literature. As a result, readers must use appropriate caution on how they use the observations made here.