UNDOCUMENTED WORKERS' EMPLOYMENT ACROSS U.S. BUSINESS CYCLES

Authors

  • J. DAVID BROWN,

    1. Brown: Institute for the Study of Labor (IZA), 53113 Bonn, Germany. Phone 301 763 8769, Fax 301 763 5932
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  • SERIFE GENC,

    1. Genc: Istanbul School of Central Banking, Central Bank of the Republic of Turkey, Istanbul, Turkey. Phone 90 216 542 3124
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  • JULIE L. HOTCHKISS,

    1. Hotchkiss: Research Department, Georgia State University and Federal Reserve Bank of Atlanta, Atlanta, GA 30309. Phone: 404 498 8198, Fax 404 498 8956
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  • MYRIAM QUISPE-AGNOLI

    1. Quispe-Agnoli: Community and Economic Development Department, Federal Reserve Bank of Atlanta, Atlanta, GA 30309. Phone 404 498 8930, Fax: 404 498 8956
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    • The views expressed in this paper are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Atlanta, the U.S. Federal Reserve System, or the Central Bank of the Republic of Turkey. The research assistance of Nicole Baerg, Gustavo Canavire, and Fernando Rios-Avila is much appreciated. We thank Giovanni Peri for providing the physical capital stock for Georgia and Robert Moore for helpful comments.


Abstract

Using matched employer-employee data from the state of Georgia, this paper investigates how employment of undocumented workers varies along the business cycle and how it differs from the adjustment in employment of documented workers. The cyclical component of undocumented employment is found to be significantly more volatile than the cyclical component of documented employment. Simulation results indicate that complementarities between documented workers and capital account for almost 90% of the difference in measured volatility between documented and undocumented employment. (JEL E24, J21, J15)

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