Changing conditions in the US labor market - Effects of the Immigration Reform and Control Act of 1986

In this paper, we assess the extent to which the Immigration Reform and Control Act (IRCA) of 1986 affected US labor market conditions facing Mexican migrant workers. Using data gathered from migrants in ten Mexican communities, as well as out-migrants from those communities located in the USA, we examined whether and how IRCA affected US wages, hours worked, and the terms of employment. Estimated period effects did not indicate a clear break in most of these variables following IRCA's passage in 1986, except for hours worked and monthly income. Our analyses did reveal a fairly consistent pattern of deterioration in the labor market conditions facing undocumented migrants, however. Compared to illegal migrants working in the USA before IRCA, those migrating afterward worked fewer hours and were less likely to have taxes withheld from their pay. We also found evidence that undocumented migrants were pushed from the agrarian to the urban economy by the increase in labor supply occasioned by the SAW program.