Giovanni Peri publishes on the Labor Market Effect of policies that reduce undocumented immigrants (2/24/14).

A key controversy in US immigration reforms is how to deal with undocumented
workers. Some policies aimed at reducing them, such as increased border security
or deportation will reduce illegal immigrants as well as total immigrants. Other
policies, such as legalization would decrease the illegal population but increase the
legal one. These policies have different effects on job creation as they affect the
firm profits from creating a new job. Economists have never analyzed this issue.
We set up and simulate a novel and general model of labor markets, with search
and legal/illegal migration between two countries. We then calibrate it to the US
and Mexico labor markets and migration. We find that policies increasing deportation
rates have the largest negative effect on employment opportunities of natives.
Legalization, instead has a positive employment effect for natives. This is because
repatriations are disruptive of job matches and they reduce job-creation by US firms.
Legalization instead stimulates firms’ job creation by increasing the total number
of immigrants and stimulating firms to post more vacancies some of which are filled
by natives.

Download the paper here.