Skip to main content
SpringerLink
Log in

Effects of occupational license access on undocumented immigrants evidence from the California reform

  • Original Article
  • Published:
Journal of Regulatory Economics Aims and scope Submit manuscript

A Correction to this article was published on 08 February 2024

This article has been updated

Abstract

In 2014, California lifted its legal work status requirement for dozens of occupational licenses - a major obstacle for undocumented immigrants in the US to access professional jobs. This paper assesses this policy’s effects on the employment outcome of undocumented immigrants in the state . Analyzing likely undocumented immigrants in the American Community Survey, I find that the policy increased their employment, particularly in lower-education and blue-collar licensed occupations and for older and Hispanic workers. The effects were not driven by job switchers but by the unemployed transiting into employment. I also find that the law did not crowd out documented workers.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Data availibility

The public use data (ACS and CPS) can be downloaded through IPUMS.

Change history

Notes

  1. According to the 2020 census, only 10 states have a population that exceeds 10 million.

  2. I also find similar patterns using data from the Current Population Survey (CPS) as a robustness check.

  3. Lara (2014) also provides an executive summary of this policy.

  4. In appendix Table 8, I summarize similar policies in other states.

  5. Examples of earlier federal reforms that offer access to work and higher education for immigrants include the Development, Relief, and Education for Alien Minors (DREAM) Act and Deferred Action for Childhood Arrivals (DACA).

  6. An important symbolic legislation is SB 396, which removed most of the restrictions mandated by Proposition 187.

  7. Undocumented immigrants are not eligible for Social Security numbers (SSNs), which are used to prove one’s identity for most occupational licenses. Immigrants under the DACA or with temporary protected status in principle were eligible for a license as long as they had an SSN.

  8. The data are pooled from IPUMS USA (Ruggles et al., 2022).

  9. Borjas (2017) adopts a similar approach to analyze undocumented workers in the CPS.

  10. The list of universally licensed professions can be found in Gittleman (2018).

  11. The states are Washington, DC, Illinois, Maryland, Nevada, and Vermont in 2014; California, Colorado, and Connecticut in 2015; and Delaware and Hawaii in 2016. See more details in appendix Table 10.

  12. This indirect spillover can work through peer effect in a community (Kondo & Shoji, 2019) or the multiplier effect through income and local consumption (Moretti, 2010).

  13. The crosswalk is publicly available at https://www.census.gov/topics/employment/industry-occupation/guidance/code-lists.html.

  14. When including the employed workers in other professions, the coefficient of the same regression in column 1 of Table 4 becomes insignificant. Because the policy may elicit indirect spillover and increase employment in other professions, including them as ‘0’ nullifies the magnitude. The comparison between ‘employed in covered professions’ versus ‘unemployed’ yields a sharper contrast.

  15. I define documented immigrants as foreign-born workers who report their year of immigration to the US and do not satisfy the undocumented criteria by Amuedo-Dorantes et al. (2020).

References

  • Alvarez, R Michael, Butterfield, Tara L. (2000). The resurgence of nativism in California? The case of Proposition 187 and illegal immigration, Social Science Quarterly, pp. 167–179.

  • Amuedo-Dorantes, Catalina, Arenas-Arroyo, Esther, & Sevilla, Almudena. (2020). Labor market impacts of states issuing of driver’s licenses to undocumented immigrants. Labour Economics, 63, 101805.

    Article  Google Scholar 

  • Arroyo, Esther Areans, & Schmidpeter, Bernhard. (2022). Spillover effects of immigration policies on children’s human capital.

  • Baker, Andrew C., Larcker, David F., & Wang, Charles CY. (2022). How much should we trust staggered difference-in-differences estimates? Journal of Financial Economics, 144(2), 370–395.

    Article  Google Scholar 

  • Blair, Peter Q., & Chung, Bobby W. (2019). How much of barrier to entry is occupational licensing? British Journal of Industrial Relations, 57(4), 919–943.

    Article  Google Scholar 

  • Blair, Peter Q., & Chung, Bobby W. (2021). A model of occupational licensing and statistical discrimination. AEA Papers and Proceedings, 111, 201–205.

    Article  Google Scholar 

  • Blair, Peter Q, & Chung, Bobby W. (2022). Job market signaling through occupational licensing, Review of Economics and Statistics, pp. 1–45.

  • Borjas, George J. (2017). The labor supply of undocumented immigrants. Labour Economics, 46, 1–13.

    Article  Google Scholar 

  • Brücker, Herbert, Glitz, Albrecht, Lerche, Adrian, & Romiti, Agnese. (2021). Occupational recognition and immigrant labor market outcomes. Journal of Labor Economics, 39(2), 000–000.

    Article  Google Scholar 

  • Cassidy, Hugh, & Dacass, Tennecia. (2021). Occupational Licensing and Immigrants. The Journal of Law and Economics, 64(1), 1–28.

    Article  Google Scholar 

  • Cho, Heepyung. (2022). Driver’s license reforms and job accessibility among undocumented immigrants. Labour Economics, 76, 102174.

    Article  Google Scholar 

  • Chung, Bobby W, & Zou, Jian. (2021). Teacher Licensing, Teacher Supply, and Student Achievement: Nationwide Implementation of edTPA, Technical Report, HCEO Working Paper.

  • Churchill, Brandyn F, Mackay, Taylor, & Tan, Bing Yang. (2023). Driver’s Licenses for Unauthorized Immigrants and Auto Insurance, The Center for Growth and Opportunity.

  • Citrin, Jack, Green, Donald P., Muste, Christopher, & Wong, Cara. (1997). Public opinion toward immigration reform: The role of economic motivations. The Journal of Politics, 59(3), 858–881.

    Article  Google Scholar 

  • Federman, Maya N., Harrington, David E., & Krynski, Kathy J. (2006). The impact of state licensing regulations on low-skilled immigrants: The case of Vietnamese manicurists. American Economic Review, 96(2), 237–241.

    Article  Google Scholar 

  • Gittleman, Maury, Klee, Mark A., & Kleiner, Morris M. (2018). Analyzing the labor market outcomes of occupational licensing. Industrial Relations: A Journal of Economy and Society, 57(1), 57–100.

    Article  Google Scholar 

  • Gomez, Rafael, Gunderson, Morley, Huang, Xiaoyu, & Zhang, Tingting. (2015). Do immigrants gain or lose by occupational licensing? Canadian Public Policy, 41(Supplement 1), S80–S97.

    Article  Google Scholar 

  • Grelewicz, Josh. (2020). Are occupational licensing restrictions binding for undocumented immigrants? Evidence from California.

  • Hainmueller, Jens. (2012). Entropy balancing for causal effects: A multivariate reweighting method to produce balanced samples in observational studies. Political Analysis, 20(1), 25–46.

    Article  Google Scholar 

  • Kleiner, Morris M. (2000). Occupational licensing. Journal of Economic Perspectives, 14(4), 189–202.

    Article  Google Scholar 

  • Kleiner, Morris M., & Krueger, Alan B. (2013). Analyzing the extent and influence of occupational licensing on the labor market. Journal of Labor Economics, 31(S1), S173–S202.

    Article  Google Scholar 

  • Kondo, Ayako, & Shoji, Masahiro. (2019). Peer effects in employment status: Evidence from housing lotteries. Journal of Urban Economics, 113, 103195.

    Article  Google Scholar 

  • Lara, Ricardo. (2014). Realizing the DREAM: Expanding access to professional licenses for California’s undocumented immigrants. Harvard Journal of Hispanic Policy, 27, 26.

    Google Scholar 

  • Law, Marc T., & Marks, Mindy S. (2009). Effects of occupational licensing laws on minorities: Evidence from the progressive era. The Journal of Law and Economics, 52(2), 351–366.

    Article  Google Scholar 

  • Massey, Douglas S., & Gentsch, Kerstin. (2014). Undocumented migration to the United States and the wages of Mexican immigrants. International Migration Review, 48(2), 482–499.

    Article  Google Scholar 

  • Moretti, Enrico. (2010). Local multipliers. American Economic Review, 100(2), 373–377.

    Article  Google Scholar 

  • Olivas, M. A. (2017). Within you without you: Undocumented lawyers, DACA, and occupational licensing. Val UL Rev, 52, 65.

    Google Scholar 

  • Passel, Jeffrey S. (1986). Undocumented immigration. The Annals of the American Academy of Political and Social Science, 487(1), 181–200.

    Article  Google Scholar 

  • Peterson, Brenton D., Pandya, Sonal S., & Leblang, David. (2014). Doctors with borders: occupational licensing as an implicit barrier to high skill migration. Public Choice, 160(1), 45–63.

    Article  Google Scholar 

  • Plemmons, Alicia. (2023). Occupational licensing effects on firm entry and employment, The Center for Growth and Opportunity.

  • Rubalcaba, Joaquin, Bucheli, José R., & Morales, Camila. (2023). Immigration Enforcement and Labor Supply: Hispanic Youth in Mixed-Status Families, The Center for Growth and Opportunity.

  • Ruggles, Steven, Flood, Sarah, Goeken, Ronald, Schoueiler, Megan, & Sobek, Matthew. (2022). IPUMS USA: Version 12.0. Minneapolis, MN: IPUMS, 2023-2-28. https://doi.org/10.18128/D010.V12.0.

  • Sheehan, Kathleen, Thomas, Diana. (2023). Gender, Race, and Earnings: The Divergent Effect of Occupational Licensing on the Distribution of Earnings and on Access to the Economy, The Center for Growth and Opportunity.

  • Tani, Massimiliano. (2020). Occupational Licensing and the Skills Mismatch of Highly Educated Migrants, British Journal of Industrial Relations.

  • Warren, Robert. (2020). Reverse Migration to Mexico Led to US Undocumented Population Decline: 2010 to 2018. Journal on Migration and Human Security, 8(1), 32–41.

    Article  Google Scholar 

  • Williams, Christy. (2019). Professional and Occupational Licenses for Immigrants. Catholic Legal Immigration Network: Technical Report.

    Google Scholar 

  • Xia, Xing. (2021). Barrier to entry or signal of quality? The effects of occupational licensing on minority dental assistants. Labour Economics, 71, 102027.

    Article  Google Scholar 

Download references

Funding

Not Applicable

Author information

Authors and Affiliations

  1. Department of Economics, University of South Florida, Tampa, USA

    Bobby W. Chung

  2. HCEO (University of Chicago), Chicago, USA

    Bobby W. Chung

  3. Knee Regulatory, Research Center (West Virginia University), West Virigina, USA

    Bobby W. Chung

Authors
  1. Bobby W. Chung
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Bobby W. Chung.

Ethics declarations

Ethical approval

Not Applicable

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

The original online version of this article was revised due to corrections made in the city names of author’s second and third affiliation.

This research was developed from the policy report “Benefits of Granting Occupational License Access to Undocumented Immigrants: Evidence from California Reform and Implications for Illinois," which was gratefully supported by the Project for Middle Class Renewal at UIUC. I am grateful for the suggestions from anonymous referees at the journal and at the Center for Growth and Opportunity that greatly improve the analysis and the exposition in various versions of the paper. I am also thankful for comments from Robert Bruno, Josh Grelewicz, JooHee Han, and seminar participants at BE-Lab, St. Bonaventure University, and the 2023 Markets & Society Conference. All errors are my own.

Appendices

Appendix I: Additional Background Information

See Tables 8, 9, 10, 11 and 12.

Table 8 Summary of Lifting License Restrictions for Immigrants
Full size table
Table 9 License Boards under the California DCA
Full size table
Table 10 States That Granted Driver’s License Access to Undocumented Immigrants
Full size table
Table 11 Robustness of Main Results: Include Individuals Not In Labor Force
Full size table
Table 12 Replication of Main Patterns Using CPS
Full size table

Appendix II: Additional Results

Fig. 2
figure 2

More Balanced Covariates with Entropy Balancing

Full size image

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Chung, B.W. Effects of occupational license access on undocumented immigrants evidence from the California reform. J Regul Econ 65, 64–83 (2024). https://doi.org/10.1007/s11149-023-09468-9

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11149-023-09468-9

Keywords

JEL Classification

Search

Navigation