Because the Census does not have information on whether an immigrant is unauthorized or legal, we perform a series of edits of American Community Survey (ACS) data to separate legal and unauthorized immigrants, following the pioneering work of the Center for Migration Studies. We distinguish five different types of immigrants: legal short – term visa immigrants, other legal immigrants, refugees, unauthorized immigrants overstaying visas, and other unauthorized immigrants. Unauthorized immigrants overall tend to be younger, have less education and lower English skills, and work in different occupations than legal immigrants.
We determine the earnings effect of being in each of these immigrant groups, and show that legal immigrants on various short – term visas (H1-B, H2-A, H2-B) suffer the largest earnings penalty (everything else the same) of any of the immigrant groups, compared to natives. Other legal immigrants have the smallest earnings penalty, given their characteristics. There are also significant differences in receipt of government benefits between the different groups.
The results of the study should be useful for policymakers interested in reforming U.S. immigration laws to promote the entry of higher earning immigrants who may use fewer government transfer programs.