Labor Market Impacts of State-Level Professional Licensing of Undocumented Immigrants

Abstract

Since 2015, several states have enacted policies granting Deferred Action for Childhood Arrivals (DACA) recipients’ access to occupational or professional licenses. We tested the state variation in issuing occupational or professional licenses to DACA recipients to estimate their impacts on labor market outcomes. Using 2012 through 2020 data from the Current Population Survey, we show that open occupational licensing for DACA recipients significantly raises wages by 12.5 percent. This wage premium is more extensive for female than male recipients. The higher wages and more working hours from granting access to an occupational license are more significant for recipients over 25 who have finished formal education and began careers. Together these findings suggest that access to licenses may help dreamers to perform better in the labor market. Thus, access to public benefits, including licensing, yields meaningful benefits for DACA recipients in states that expanded access to occupational licensing.