  We study the effect of magnification in the Dark Energy Survey Year 3
analysis of galaxy clustering and galaxy-galaxy lensing, using two different
lens samples: a sample of Luminous red galaxies, redMaGiC, and a sample with a
redshift-dependent magnitude limit, MagLim. We account for the effect of
magnification on both the flux and size selection of galaxies, accounting for
systematic effects using the Balrog image simulations. We estimate the impact
of magnification on the galaxy clustering and galaxy-galaxy lensing cosmology
analysis, finding it to be a significant systematic for the MagLim sample. We
show cosmological constraints from the galaxy clustering auto-correlation and
galaxy-galaxy lensing signal with different magnifications priors, finding
broad consistency in cosmological parameters in $\Lambda$CDM and $w$CDM.
However, when magnification bias amplitude is allowed to be free, we find the
two-point correlations functions prefer a different amplitude to the fiducial
input derived from the image simulations. We validate the magnification
analysis by comparing the cross-clustering between lens bins with the
prediction from the baseline analysis, which uses only the auto-correlation of
the lens bins, indicating systematics other than magnification may be the cause
of the discrepancy. We show adding the cross-clustering between lens redshift
bins to the fit significantly improves the constraints on lens magnification
parameters and allows uninformative priors to be used on magnification
coefficients, without any loss of constraining power or prior volume concerns.
