VOX  CEPR Policy Portal

Legalisation of immigrant workers is a simple policy to implement and can be very effective in reducing undeclared labour, yet economists know relatively little about how host economies are affected. This column analyses Italy's largest ever legalisation to examine how the policy affects firms’ employment, shapes legalised migrants workers’ careers, and affects their co-workers. Despite regularising firms experiencing only very short-lasting employment growth, legalised migrants remained strongly attached to the formal labour market. High mobility of migrants to other firms, provinces and industries is an important driver of the results, helping to ensure that co-workers’ careers were not affected by the reform.