Full Citation
Title: The Dynamics of Immigration and Wages
Citation Type: Miscellaneous
Publication Year: 2009
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Abstract: The number of immigrants in the US economy has been increasing rapidly in recent decades. An extensive literature has investigated the eff ect of this large influx of immigrants on native workers' labor market opportunities. However, to date this literature has not reached a consensus about the consequences of immigration. In this paper, I present a new approach to the analysis ofthe relationship between immigration and wages based on a panel vector autoregression (VAR) analysis. I develop a flexible model of the joint dynamics of wages, foreign immigration, and internal migration, allowing for capital mobility. I then implement this model empirically usingannual CPS data. The VAR analysis of a 26-year panel of US states shows that immigration does not have a signifi cant effect on wages or internal migration. By contrast, wages do a ffect immigration. The estimated coefficients imply that a 10 percent increase in wages causes up to a 20 percent increase in the rate of immigrant in flow after 3 years. These estimates hide signifi cant heterogeneity: the effect is strongest for low-skill immigrants while it is small and insignifi cant for high-skill immigrants.
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Authors: Barcellos, Silvia
Publisher: RAND Corporation
Data Collections: IPUMS CPS
Topics: Labor Force and Occupational Structure, Migration and Immigration, Other
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