New Mexico State University
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NMSU study looks at link between driver’s licenses for undocumented immigrants and uninsured motorists

August 26, 2011 by Janet Perez, NMSU News Center

Allowing undocumented immigrants to obtain driver’s licenses or requiring lawful residency identification has an “insignificant impact” on the percentage of uninsured drivers in New Mexico.

That’s according to New Mexico State University’s J. Tim Query, an associate professor of finance and business law, who decided to test assertions on both sides about the correlation between driver’s licenses for undocumented immigrants and the number of uninsured motorists.

New Mexico is one of three states — including Utah and Washington — that allows immigrants to apply for a driver’s license without proving their legal residence.

Gov. Susanna Martinez has proposed that the state stop issuing driver’s licenses to undocumented immigrants. That issue will be among others state lawmakers will consider during a special legislative session in September.

New Mexico is second in the nation in uninsured drivers at 25.7 percent, with Washington in 11th place at 16.1 percent. However, only seven states have a lower percentage of uninsured motorists than does Utah. That state has an estimated 8.2 percent rate of uninsured drivers, which is well below the national average of 13.8 percent. Utah’s licenses can only be used for driving.

“When examining data from the Insurance Research Council’s (IRC) periodic study of uninsured motorists,” Query said, “evidence is somewhat mixed in that states with loose requirements for a state-issued driver’s license did not have uniformly lower percentages of uninsured motorists.”

For example, according to IRC figures, Arizona saw its uninsured motorists rate drop from 17.8 percent in 2007 to 11.9 percent in 2009 — a full year before its tough immigration law went into effect. Meanwhile, California’s uninsured drivers rate fell from 18.1 percent in 2007 to 15 percent in 2009. The IRC provided no reason for the drop in both states.

Query based his conclusions on statistics derived from the IRC, the Pew Hispanic Center, the Insurance Identification Database and the New Mexico Motor Vehicle Division. Most of the data dates to 2007, when Hawaii, Maine, Maryland, Michigan and Oregon also allowed undocumented immigrants to obtain driver’s licenses. The most recent IRC data is from 2009. Query conducted his research with Risa Kumazawa, an assistant professor in the department of economics and quantitative sciences at Duquesne University in Pittsburgh.

Query identified factors that did cause an increase in the uninsured driver rate: the actual number of undocumented immigrants and unemployment.

“On average, a 1 percentage point increase in unauthorized immigrants relative to the labor force increases the uninsured motorists rate by 0.54 percentage points,” Query said. “We also find that a 1 percentage point increase in the state unemployment rate increases the uninsured motorists rate by 1.74 percentage points.”

Query points to other studies that find the uninsured driver rate drops when mandatory insurance laws are enforced more strictly and poverty rates are lower.

“While the fraction of unauthorized immigrants matters, the lawful residency requirement has a negligible impact on the percentage on uninsured motorists, based on the results of our study,” he said.