Edoardo Di Porto (Università di Napoli "Federico II")

joint with Enrica Maria Martino and Paolo Naticchioni

This paper analyses the impact of regularizing undocumented migrant workers on labor market outcomes at firms' and individual level. Using administrative data by INPS archives, on the universe of firms, workers and enforcement strategies, we evaluate Italy's largest legalization process ever: D.l. 195/2002 aimed at providing incentives for employers and for undocumented migrants to move from informal to formal labor market. We use an extraordinary auditing program and IV strategy to deal with selection into treatment. Our results show that the regularization had a positive impact on firm employment only in the short run; nonetheless, we provide evidence that, on average, regularized migrants remain in the Italian labor market, moving in other firms, other regions and other sectors. The policy did not have negative effects on the regularized migrants' coworkers career in term of wage nor unemployment rate, but it has slightly increased their mobility towards other firms.