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Title: Newly Arriving Immigrants as Labor Market Arbitrageurs: Evidence from the Minimum Wage

Citation Type: Working Paper

Publication Year: 2010

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Abstract: This paper examines immigrants location responses to variation in states minimum wages over the past 15 years. Canonical models emphasize the importance of labor mobility in evaluating the employment effects of the minimum wage; yet few studies address this outcome directly. The results reveal that low-skilled immigrant workers prefer labor markets with stagnant minimums, and falsification tests using more educated immigrants rule out alternative explanations. This paper therefore constitutes a novel test of whether immigrants select destinations based on expected earnings. Additionally, back of the envelope calculations suggest that this endogenous location selection obscures roughly half of total disemployment effect.Keywords: minimum wage, immigration, labor mobility, spatial equilibriumJEL Classifications: J23, J61, J38

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Authors: Cadena, Brian C.

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Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Migration and Immigration

Countries: United States