Understanding the Effects of Granting Work Permits to Undocumented Immigrants

• Authors: Ferran Elias, Joan Monràs and Javier Vázquez-Grenno.
• Journal of Labor Economics, Vol. 43, No. 3, 763–802, July 2025.

Abstract

We study the regularization of 600,000 non-EU immigrants by the unexpectedly elected Spanish government following the terrorist attacks of 2004. By comparing non-EU to EU immigrants, we estimate that the policy did not lead to magnet effects. We then show that immigrant formal employment increased, while that of natives was not affected. However, there was a decrease in informal employment of both native and immigrant low-skilled workers. We document that tax revenues increased by around 4,000 euros per regularized immigrant—with no evidence of increased public expenditures. The evidence also suggests that the policy increased labor market opportunities for immigrants.