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Title: How Does Influx of Immigrants Affect Native-Born Wages
Citation Type: Miscellaneous
Publication Year: 2020
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Abstract: This paper examines how the influx in immigrants impacts the native-born average hourly-wage. This was done by using the data set from Current Population Survey (CPS). I seek to see the effect of immigrant inflow on native wages by dividing the immigrants into newly-arrived immigrants and assimilated immigrants. This paper uses a cross-sectional survey data set across 121 MSA, 50 states and one year (2017). Using Ordinary least Squared (OLS) analysis, I built an initial understanding between influx of immigrants and native-born average hourly-wage. The study found an interesting sets of results. The newly-arrived immigrants had no statistical effect on native-born average hourly-wages whereas the assimilated immigrants had a negative effect on native-born hourly wage at 90% significant level. Theoretically this result is justified as an immigrant gets assimilated over time he/she become more substitutable to the native-born worker. When the three occupational groups (professional, service-related and manual labor) are included in the analysis the study finds a statistically significant effect on native-born average hourly-wages due to professional occupation. Thus, implying that high-skilled immigrants helps expand economy which in turn increases native wages. The results suggests a negative effect on native-born average hourly-wages due to manual labor. This parameter estimate supports the theory however was statistically insignificant. One-way fixed effect was used to see the difference in average hourly-wage across metro areas and states. The fixed effect result suggests that there is no effect on native-born average hourly-wage and influx on immigrants. However, the results do imply that presence of a high-skilled immigrant will increase the native wages by 2.23%. Overall, this study could be further enhanced with a 2- Staged Least Squared (2-SLS) model. Further, future studies could examine the effect on native-born average hourly-wages due to influx of immigrants over certain number of years.
Url: https://www.uakron.edu/economics/academics/senior-projects/2020/Desai-M-SeniorProject2020.pdf
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Authors: Desai, Malav
Publisher: University of Akron
Data Collections: IPUMS CPS
Topics: Labor Force and Occupational Structure, Migration and Immigration
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