In 2015, the role of undocumented immigrants in US society has become much more prominent, with many arguing for a full amnesty for the 11 million currently in the country. In new research, Scott R. Baker finds that a 1986 amnesty for nearly 3 million undocumented immigrants led to a 3-5 percent persistent fall in crime. He writes that this fall in crime is linked to the much improved labor market prospects of previously undocumented immigrants, which led to a decreased motivation to commit crimes for economic gain

Baker, Scott R.

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blogs.lse.ac.ukhttp://blogs.lse.ac.uk/usappblog/2015/08/27/evidence-suggests-that-amnesty-for-undocumented-immigrants-in-1986-significantly-reduced-crime-in-the-us/Evidence suggests that amnesty for undocumented immigrantsin 1986 significantly reduced crime in the USIn 2015, the role of undocumented immigrants in US society has become much more prominent,with many arguing for a full amnesty for the 11 million currently in the country. In new research,Scott R. Baker finds that a 1986 amnesty for nearly 3 million undocumented immigrants led to a3-5 percent persistent fall in crime. He writes that this fall in crime is linked to the much improvedlabor market prospects of previously undocumented immigrants, which led to a decreasedmotivation to commit crimes for economic gain. Beginning in the late 1970’s, rates of undocumented immigration into the United States began toincrease dramatically. Fearing negative labor market and social effects, Congress passed the 1986 ImmigrationReform and Control Act (IRCA). The primary purpose of the bill was to enhance controls on the hiring andrecruiting of undocumented immigrants. However, the legislation also represented a near-universal legalization ofundocumented immigrants in the United States, a group comprising almost 3 million people, about 1 percent ofthe nation’s population.This widespread legalization drove a persistent decline in crime of approximately 3-5 percent, equivalent to120,000-180,000 fewer crimes committed each year across the nation, primary due to a large fall in propertycrimes. This decline cannot be explained by pre-existing trends, economic conditions, declines in drug crimes,changes to police forces and prison populations, or other common explanations of changes in crime rates duringthis period.Looking more deeply into prior literature and examining surveys conducted on the legalized IRCA applicants, Ifind strong evidence that the decline in crime was caused by enhanced levels of human capital and greater labormarket opportunities resulting from becoming legal residents.For information about the actual legalizations that took place, I use Legalization Summary Tapes created by theImmigration and Naturalization Service (INS). This database allows me to quantify the number and thedemographics of the IRCA applicants in each county in the United States as well as their application andlegalization dates. Overall, the mean ratio of IRCA applicants to county population is approximately 0.9 percent,with individual county values ranging from 0 percent to over 20 percent. I also utilize the FBI’s annual UniformCrime Reports (UCR) from 1980-2000. These data are assembled annually at a country level using astandardized methodology across the country and give detailed information about the numbers and types of crimecommitted.The application review process of the IRCA was one of the largest bureaucratic undertakings ever attempted bythe INS up to that time. Setting up over 100 `legalization offices’, the INS sent paperwork around the country inorder to distribute work. The unfamiliarity of the INS with the massive undertaking, as well as the underestimate ofthe number of applicants, meant the INS was overwhelmed and the application approval process took muchlonger for some applicants than others. In essence, it meant that if two identical IRCA applicants applied in mid-1987, one might be legalized by the end of 1987 while the other was left without legal status for up to 3 additionalyears.I exploit this quasi-random variation in the timing and geographical variation of legalizations in order to examinethe link between increasing legalizations and changes in crimes committed in each county. I use a cumulativemeasure of the legalized population in each county and compare to annualized crime per capita. Figure 1 gives anexample of the cumulative fraction of legalized IRCA applicants per capita in Santa Clara County over time. Thefraction starts at zero, rapidly increases during the years of legalization, and then declines as the countypopulation continues to grow over time after all legalizations have occurred.Figure 1 – Cumulative fraction of IRCA applicants over timeRegressing logged crime per capita on the cumulative number of county-level IRCA legalizations per capita, I findan approximate 4.5 percent decline in crime associated with 1 percent of a county’s population being legalized. Ifind significantly smaller effects for violent crimes and larger effects when restricting to property crimes.After undertaking robustness tests, I find that no other commonly cited drivers of crime can account for theobserved relationship between legalizations and crime. Some of these alternative explanations include changes inprison populations or numbers of police, abortion’s legalization, changes in the drug trade, or simply pre-existingtrends in urban crime. Moreover, utilizing the data on both applications for legalization and actual legalizations, Ifind that it was only the legalization itself that is associated with decreases in crime, not simply the application ordesire for legalization.Modelling the labor market Applicants to the 1986 IRCA were surveyed in two waves in 1987 and 1992. Among other questions, they wereasked about how legalization impacted their decisions to pursue education, English language fluency, andadditional labor market responsibility and higher wages. The vast majority of applicants reported that legalizationimproved their labor market prospects and led to increases in education and language skills. These responsesindicate a strong role of legal residency in strengthening labor market status and human capital, concurring withprevious literature on the subject.To more formally explain the role that great labor market access played in linking legalization and crime, Iconstruct a model of the labor market relating shifts in labor market opportunity with changes in rates of crime.Agents in this model endogenously shift time spent in different sectors (e.g. formal sector work, lower-payinginformal sector work, job search, and crime) as labor market characteristics change. In this model, the level ofcrime is equal to the total proportion of time allocated to the crime sector throughout the economy relative to thetotal amount of time available. The key mechanism is that immigrants are only able to access the formal (andhigher-paying) sector following their legalization, decreasing the motivation to commit crimes for economic gain.Calibrating to real-world parameters like wage rates and unemployment rates, this model predicts that levels ofcrime would drop by approximately 3.25 percent over the years following the IRCA’s legalization program. Asapplicants’ wage and labor market access grew, time in the crime sector falls and applicants gradually shift moretime into the formal sector.Figure 2 displays a comparison of the model’s predicted changes in crime and the empirically observed declinesassociated with IRCA applicant legalizations. The model’s data display the decline in the fraction of time spent inthe crime sector across all members in the simulated economy. The empirical data represent the estimatedcontribution of the IRCA applicant population to crime in a given county over time. That is, in a county that had 1percent of its population consisting of IRCA applicants, the empirically observed amount of crime in a countytended to fall precisely during the years in which legalization occurred. This time-profile is consistent with acausal negative impact of legalization on crime and also with the gradual transition of IRCA applicants into thelabor force, substituting away from criminal activities. Figure 2 – Predicted and actual changes in crime associated with IRCA applicant legalizations  Undocumented immigration has been, and will remain, an important topic in American politics and around theglobe. One common method of dealing with undocumented immigration is a general or targeted amnestyprogram. I find that the implications of this amnesty program on the commission of crime are large, with estimateddeclines in crime of approximately 3 percent-5 percent for each 1 percent of the population being legalized in theUnited States. This decline is higher for property crime than for violent crime, consistent with greater access to theformal labor market being a primary cause of the decline in crime.This article is based on the paper, ‘Effects of Immigrant Legalization on Crime’, in the American EconomicReview: Papers & Proceedings 2015.Featured image credit: Robert Couse-Baker (Flickr, CC-BY-2.0)Please read our comments policy before commenting.           Note:  This article gives the views of the author, and not the position of USAPP – American Politics and Policy, norof the London School of Economics.Shortened URL for this post: http://bit.ly/1KmQy1Y _________________________________ About the author Scott R. Baker – Northwestern UniversityScott Ross Baker is an Assistant Professor of Finance in the Kellogg School of Management atNorthwestern University. His research is concentrated in empirical finance and macroeconomics.Recent work examines the impact of household leverage and credit constraints in drivingsensitivity to both income and asset shocks.CC BY-NC 3.0 2015 LSE USAPP

Evidence suggests that amnesty for undocumented immigrantsin 1986 significantly reduced crime in the US

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