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Title: Immigrant Wages and Recessions: Evidence from Undocumented Mexicans

Citation Type: Miscellaneous

Publication Year: 2015

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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 natives, suggesting that the frequent renegotiation of contracts leads to greater wage flexibility. Because migration decisions also adjust to these wage changes, the ob- served equilibrium wages are capturing both lowered aggregate productivity and a smaller supply of migrant workers. To separate these effects, we analyze an equi- librium 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 reduces the volatility of native employment over the business cycle.

Url: https://econ.ucalgary.ca/sites/econ.ucalgary.ca/files/rebeccalessemf15.pdf

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Authors: Lessem, Rebecca; Nakajima, Kayuna

Publisher: Carnegie Mellon University and NBER

Data Collections: IPUMS USA

Topics: Migration and Immigration, Race and Ethnicity

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