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Title: The Impacts of Immigration on Wages, Welfare and the Migration Responses
Citation Type: Miscellaneous
Publication Year: 2013
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Abstract: Over the past few decades, the number of immigrants entering the U.S. has increased substantially. This paper studies the wage and welfare implications of immigration, and the migration responses of workers. The local impacts of immigration may differ from national impacts since some cities attract more immigrants, and workers have different degrees of mobility. In particular, moving may be more costly for lower skill and older workers. I develop and estimate a spatial equilibrium model where labor differs by skill level, gender, experience and nativity. Cities vary in productivity levels, housing prices and local amenities. Workers are heterogeneous in city preferences and place attachments. The results indicate that a 10 percent increase in the stock of immigrants has a small impact on the average wages and welfare of natives. If the incumbent workers (natives and previous immigrants) are constrained to remain in their original locations, the initial wage impacts on previous immigrants are negative and much more severe in the popular destinations for new immigrants. When workers migrate in response to the immigration, the negative wage impacts are generally diffused. However, in some locations the negative impacts on the wages of low skill workers intensify. This is because low skill workers have stronger attachments to places, and hence are less mobile relative to high skill workers. An out-migration of workers of a given type raises the local wages for all workers of that type, while reducing the local wages of workers with complimentary characteristics. The extent to which the migration responses reduce the adverse wage impacts depends on the city's labor composition. The migration responses, however, significantly reduce the negative effects on welfare. Additionally, I use the model to assess skill-selective and location-specific immigration policies.
Url: https://pdfs.semanticscholar.org/93be/93b2e3d2f3a3d045a1f6f55ec241fac1a58f.pdf
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Authors: Piyapromdee, Suphanit
Publisher: UW-Madison
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Migration and Immigration, Poverty and Welfare
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