Examining the Impact of Legal Arizona Worker Act on Native Female Labor Supply in the United States

Christian Gunadi

doi:10.2478/izajolp-2020-0003

Abstract

Abstract Low-skilled immigration has been argued to lower the price of services that are close substitutes for household production, reducing barriers for women to enter the labor market. Therefore, policies that reduce the number of low-skilled immigrants who work predominantly in low-skilled service occupations may have an unintended consequence of lowering women’s participation in the labor market. This article examines the labor supply impact of the Legal Arizona Workers Act (LAWA), which led to a large decline in the low-skilled immigrant workforce of the state. The analysis shows no evidence that LAWA statistically significantly affected US-born women’s labor supply in Arizona. This finding is partly explained by an increase in native workers in household service occupations due to LAWA, which offset the decline in immigrants in these occupations and caused the cost of household services to be relatively uninfluenced by the passage of LAWA.

Highlights

Between 1970 and 2000, the participation rate of female labor force in the United States increased from 43.4% to 61% (Acemoglu et al, 2004)
I examined the impact of the Legal Arizona Workers Act (LAWA) of 2007, which require all employers in Arizona to verify if a worker is authorized to work in the United States through the federal E-Verify system, on the native female labor supply
The influx of low-skilled immigrants has been argued to reduce the price of household services and alter the optimal time allocation between household production and market work for women (e.g., Cortes, 2008; Cortes and Tessada, 2011; Barone and Mocetti, 2011)

Summary

Introduction

Between 1970 and 2000, the participation rate of female labor force in the United States increased from 43.4% to 61% (Acemoglu et al, 2004). The universal E-Verify program such as LAWA can be traced back to the Immigration Reform and Control Act (IRCA) of 1986, which requires new hires to present documents verifying their eligibility to work legally in the US and imposes sanctions on employers knowingly hiring unauthorized immigrants. These measures to curb unauthorized employment in IRCA, have been argued to be ineffective because there was no reliable, quick way to verify the authenticity of the documents used to prove identity and work authorization (Cooper and O’Neil, 2005). The inaccuracy rate of E-Verify is approximately 1%, while for unauthorized workers, the error rate is approximately 54% (Westat, 2009)

Methods

Results

Conclusion