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Title: Immigrants' Labor Decisions and Exchange Rate Shocks

Citation Type: Miscellaneous

Publication Year: 2012

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Abstract: Shocks to the home country affect immigrants' decisions in real time, due to economic ties to their home country. This paper demonstrates this effect, exploiting exchange rate variation as an exogenous price shock to immigrants. In response to an appreciation of the U.S. Dollar, immigrants earn less, consume more, and send less money home. The estimated exchange rate elasticity of earnings is -0.092. The sign of the elasticity implies that the income effect of the exchange rate on earnings is larger than the substitution effect. Its magnitude offers lower bounds for risk aversion and the unearned income elasticity of earnings.

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Authors: Nekoei, Arash

Publisher: Harvard University

Data Collections: IPUMS USA

Topics: Migration and Immigration, Other

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