Who Signs Up for E-Verify? Insights from DHS Enrollment Records

Abstract

E-Verify is a federal electronic verification system that allows employers to check whether their newly hired workers are authorized to work in the United States. To use E-Verify, firms first must enroll with the Department of Homeland Security (DHS). Participation is voluntary for most private-sector employers in the United States, but eight states currently require all or most employers to use E-Verify. This article uses confidential data from DHS to examine patterns of employer enrollment in E-Verify. The results indicate that employers are much more likely to sign up in mandatory E-Verify states than in states without such mandates, but enrollment is still below 50 percent in states that require its use. Large employers are far more likely to sign up than small employers. In addition, employers are more likely to newly enroll in E-Verify when a state’s unemployment rate or the state’s population share of likely unauthorized immigrants rises. However, enrollment rates are lower in industries with higher shares of unauthorized workers. Taken as a whole, the results suggest that enrolling in the program is costly for employers in terms of both compliance and difficulty in hiring workers. A strictly enforced nationwide mandate that all employers use an employment eligibility program like E-Verify would be incompatible with the current reliance on a large unauthorized workforce. Allowing more workers to enter legally or legalizing existing workers might be necessary before implementing E-Verify nationally.