The Impact of IRCA on the Job Opportunities and Earnings of Mexican- American and Hispanic-American Workers

Abstract

The 1986 Immigration Reform and Control Act (IRCA) introduced substantial civil and/or criminal penalties to employers who hire illegal workers with the main goal of reducing the demand for undocumented labor. However in the interest of addressing certain concerns about the law the Immigration Act of 1990 was passed to require various branches of the federal government to intensify efforts to disseminate the antidiscrimination provisions of IRCA. The authors studied the earnings gap between Mexican Hispanic and non-Hispanic white male workers which resulted from changes in both the wage structure and immigration laws of the 1980s. It appears that Mexican and Hispanic workers were adversely affected by the changes. The analysis of data from the 1980 and 1990 1% Public Use Microdata Samples determined that Mexican and Hispanic labor were adversely affected by the increase in the returns to skills during the 1980s given their relatively lower levels of educational attainment and labor market experience. At-risk workers increased their work effort and level of productivity to reduce the effects of legislation-induced employment losses. Data were also used from the National Longitudinal Survey of Youth and the Equal Employment Opportunity Commission for the period 1983-92.