Salvatore Carrozzo (Parthenope University of Naples)
Maria Rosaria Carillo
The influx of undocumented workers in developed countries has sparked concerns about the potential impact of regularization programs on incumbent workersÂ’ labor market outcomes. To investigate this, we analyze two distinct Italian regularization programs: the 2002 Bossi-Fini amnesty and the 2007 EU enlargement. Our findings reveal that the Bossi-Fini, which required employers to initiate regularization, led to a decrease in formal employment among incumbent workers. Conversely, the EU enlargement, which automatically granted legal status to new EU citizens, resulted in an increase in formal employment. The contrasting outcomes can be attributed to the differing administrative procedures. Employer-initiated regularization strengthened firmsÂ’ bargaining positions, potentially harming incumbent workers. In contrast, automatic legal status granted to new EU citizens may have provided workers with greater bargaining power, leading to improved labor market outcomes.