Immigration-Induced Labor Mobility and Firm Skill Downgrading: Evidence from DACA

How do firms change their labor market strategies in response to immigration policy? Using high frequency data on over 200 million online job postings, I analyze firms' labor market response to the passing of Deferred Action for Childhood Arrivals (DACA) in 2012. I first use American Community Survey data and find that DACA triggers upward mobility among eligible recipients. In addition, post the DACA announcement, firms increase the number of job postings in counties that are more exposed to DACA eligible undocumented immigrants, especially for low-skilled jobs requiring less complex problem solving skills, jobs that require only high-school degrees, and part-time jobs. These effects are most prominent among financially constrained firms and those that express greater concerns about immigration in conference calls. The effects on firm skill downgrading are only significant among states that have better worker protection, with no enacted Right-to-Work laws, and those that grant easier access to higher education for DACA recipients. My results highlight the impacts of immigration policy on firms' labor market strategies and the corresponding implications for firms' financial constraints.