Legal status and the criminal activity of immigrants

We present a theoretical model of immigration and crime in which legal status raises the opportunity cost of crime, illegal immigrants may be deported, and there is endogenous selection into legal status. We estimate the model exploiting administrative records on the universe of prison inmates pardoned with a clemency bill in Italy on August 2006, and exogenous variation in legal status after the European Union enlargement of January 2007. The causal effect of legal status amounts to a 50% reduction in recidivism, and explains 1/2 to 2/3 of the observed differences in crime rates between legal and illegal immigrants.