It's presumably harder to forge a cryptographic signature than paper documents? Not saying it's a good tradeoff. But executed competently, it makes sense in theory.
Unless there is both serious pressure from the state and the population at large supports a massive increase in checking and being checked I struggle to see this working.
During the pandemic various countries experimented with mandating showing of QR codes to do stuff to "prove" compliance ... yet looking back on that, all it seems to have done is accelerate the erosion of trust in politicians and systems of government :/
Someone who is prepared to pay people smugglers to help them cross a border illegally may not choose to restrict themselves to working in "the formal economy".
"Illegal working and streams of taxis - BBC gains rare access inside asylum hotels"
For criminals it is already essentially impossible to forge new polycarbonate documents. Acquiring them by defrauding the application processes remains easy however.
Of course, if the person checking doesn't know what the real document feels like in their hand, whether it's real polycarbonate or a shit laminated TESLIN fake makes little difference.
So currently at least, a good forged passport will work everywhere except on e-gates. Although on the other hand actually procuring for example a decent forged polycarbonate passport (which most new EU passports are) is next to impossible, the printing techniques used require such expensive machinery that criminals simply don't have access to them.
I've held probably thousands of forged passports, never seen a decent polycarbonate one. Perfect EU id cards you can find everywhere, a lot of them still printed on Teslin.