Improved legal status as the major source of earnings premiums associated with intermarriage: evidence from the 1986 IRCA amnesty

Exploiting a natural experiment, this paper uses the 1990 US Census data and the 1986 Immigration Reform and Control Act amnesty to investigate the major mechanism through which intermarriage influences immigrant earnings. My strategy involves comparing international marriage premiums received by two groups of Mexican immigrants who arrived before and after the cutoff date of eligibility. Both groups face similar language and culture related obstacles and have to adapt themselves to the new environment, except that unauthorized Mexican workers who arrived before 1982 could obtain legal status through the amnesty while those who arrived after the cutoff date obtained legal status through marriage to a US citizen. Instrumental variables estimates show a significantly larger intermarriage premium for Mexican immigrants who migrated after the cutoff date and no statistically significant intermarriage premium is found in the pre-1982 group. The 35 % premium gap indicates a large effect of intermarriage on immigrant labor market outcomes, operating primarily through an improvement of legal status.