Full Citation

Title: Immigrant wages and recessions: Evidence from undocumented Mexicans

Citation Type: Journal Article

Publication Year: 2019

ISBN:

ISSN: 00142921

DOI: 10.1016/j.euroecorev.2019.02.004

NSFID:

PMCID:

PMID:

Abstract: We study the impact of recessions on the real wages of undocumented immigrants in the US using data from the Mexican Migration Project. Empirical evidence shows that undocumented immigrants experience larger wage drops during recessions than legal immigrants, suggesting that the frequent renegotiation of contracts leads to greater wage flexibility. Because migration decisions also adjust to these wage changes, the observed equilibrium wages are capturing both lowered aggregate productivity and a smaller supply of migrant workers. To separate these effects, we analyze an equilibrium migration model where native wages are rigid while immigrant wages are flexible. In a counterfactual experiment with a fixed supply of immigrant workers, we see a stronger relationship between aggregate negative productivity shocks and immigrant wages. We also find that the flexibility of immigrant wages could reduce the volatility of high-skilled native employment over the business cycles, but magnifies the volatility of low-skilled native employment.

Url: https://www.sciencedirect.com/science/article/pii/S0014292119300261

User Submitted?: No

Authors: Lessem, Rebecca; Nakajima, Kayuna

Periodical (Full): European Economic Review

Issue:

Volume: 114

Pages: 92-115

Data Collections: IPUMS USA

Topics: Migration and Immigration, Race and Ethnicity

Countries: