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Illegal Migration and Consumption Behavior of Immigrant Households

Dustmann, C; Fasani, F; Speciale, B; (2017) Illegal Migration and Consumption Behavior of Immigrant Households. Journal of the European Economic Association , 15 (3) pp. 654-691. 10.1093/jeea/jvw017. Green open access

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Abstract

We analyze the effect of immigrants’ legal status on their consumption behavior using unique survey data that samples both documented and undocumented immigrants. To address the problem of sorting into legal status, we propose two alternative identification strategies as exogenous source of variation for current legal status: First, transitory income shocks in the home country, measured as rainfall shocks at the time of emigration. Second, amnesty quotas that grant legal residence status to undocumented immigrants. Both sources of variation create a strong first stage, and—although very different in nature—lead to similar estimates of the effects of illegal status on consumption, with undocumented immigrants consuming about 40% less than documented immigrants, conditional on background characteristics. Roughly one quarter of this decrease is explained by undocumented immigrants having lower incomes than documented immigrants. Our findings imply that legalization programs may have a potentially important effect on immigrants’ consumption behavior, with consequences for both the source and host countries.

Type: Article
Title: Illegal Migration and Consumption Behavior of Immigrant Households
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/jeea/jvw017
Publisher version: https://doi.org/10.1093/jeea/jvw017
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: legal status, weather shocks, consumption behavior
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10042694
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