Full Citation

Title: Dynamic Responses to Immigration

Citation Type: Miscellaneous

Publication Year: 2017

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: This paper analyzes the dynamic effects of immigration on worker outcomes by estimating an equilibrium model of local labor markets in the United States. The model includes firms in multiple cities and multiple industries which combine capital, skilled and unskilled labor in production, and forward-looking workers who choose their optimal industry and location each period as a dynamic discrete choice. Immigrant inflows change wages by changing factor ratios, but worker sector and migration choices can mitigate the effect of immigration on wages over time. I estimate the model via simulated method of moments by leveraging differences in wages and labor supply quantities across local labor markets to identify how wages and worker choices respond to immigrant inflows. Counterfactual simulations yield the following main results: (1) a sudden unskilled immigration inflow leads to an initial wage drop for unskilled workers which decreases by over half over 20 years; (2) both workers sector-switching and migration across local labor markets play important roles in mitigating the effects of immigration on wages; (3) a gradual immigration inflow leads to significantly smaller effects on native wages than a sudden inflow of the same magnitude.

Url: http://econ.as.nyu.edu/docs/IO/46072/colasJMP.pdf

User Submitted?: No

Authors: Colas, Mark

Publisher: University of Wisconsin

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Migration and Immigration

Countries: