Return migrants and the wage premium: does the legal status of migrants matter?

This paper examines the impact of the legal status of overseas migrants on their wages upon return to the home country. Using unique data from Egypt, which allows us to distinguish between return migrants according to whether their international migration was documented or undocumented, we examine the impact of illegal status on wages upon return. Relying on a Conditional Mixed Process model, which takes into account the selection into emigration, into return, and into the legal status of temporary migration, we find that, upon return, undocumented migrants experience a wage penalty compared with documented migrants, as well as relative to non-migrants. Our results are the first to show the impact of undocumented migration on the migrant upon return to the country of origin.