TY  - RPRT
        AU  - Brown, J. David
AU  - Hotchkiss, Julie L.
AU  - Quispe-Agnoli, Myriam
        TI  - Undocumented Worker Employment and Firm Survival
        PY  - 2009/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 3936
        UR  - https://www.iza.org/index.php/publications/dp3936
        AB  - Do firms employing undocumented workers have a competitive advantage? Using administrative data from the state of Georgia, this paper investigates the incidence of undocumented worker employment across firms and how it affects firm survival. Firms are found to engage in herding behavior, being more likely to employ undocumented workers if competitors do. Rivals' undocumented employment harms firms' ability to survive, while firms' own undocumented employment strongly enhances their survival prospects. This suggests that firms enjoy cost savings from employing lower-paid undocumented workers at wages less than their marginal revenue product. The herding behavior and competitive effects are found to be much weaker in geographically broad product markets, where firms have the option to shift labor-intensive production out of state or abroad.
        KW  - monopsony
KW  - firm dynamics
KW  - undocumented workers
KW  - immigration policy
        ER  -