Labor market impacts of states issuing of driver's licenses to undocumented immigrants

Abstract

Over the last years several states have enacted policies granting undocumented immigrants access to driver's licenses. We exploit the state and temporal variation in the issuing of state driver's licenses to undocumented immigrants to estimate their impact on labor market outcomes. Using 2005 through 2017 data from the American Community Survey, we show that likely undocumented men increase their weekly hours of work in response to the availability of driver's licenses. Perhaps due to their already high labor force participation, the impact is somewhat moderate. We also find no similar impacts among similarly skilled foreign-born Hispanic men who have naturalized. The policy slightly raises commuting time, suggesting changes in work patterns, as well as likely undocumented immigrants’ propensity to have an occupation that requires driving. At a time when anti-immigrant sentiments are at an all-time high, understanding how these policies impact targeted groups and similarly skilled citizens is crucial for maintaining an informed immigration policy debate.