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The Effects of Minimum Wages on Low‐Skilled Immigrants’ Wages, Employment, and Poverty

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  • Brandyn F. Churchill
  • Joseph J. Sabia

Abstract

Raising the minimum wage has been advanced as complementary policy to comprehensive immigration reform to improve low‐skilled immigrants’ economic well‐being. While adverse labor demand effects could undermine this goal, existing studies do not detect evidence of negative employment effects. We re‐investigate this question using data from the 1994 to 2016 Current Population Survey and conclude that minimum wage increases reduced employment of less‐educated Hispanic immigrants, with estimated elasticities of around –0.1. However, we also find that the wage and employment effects of minimum wages on low‐skilled immigrants diminished over the last decade. This finding is consistent with more restrictive state immigration policies and the Great Recession inducing outmigration of low‐skilled immigrants, as well as immigrants moving into the informal sector. Finally, our results show that raising the minimum wage is an ineffective policy tool for reducing poverty among immigrants.

Suggested Citation

  • Brandyn F. Churchill & Joseph J. Sabia, 2019. "The Effects of Minimum Wages on Low‐Skilled Immigrants’ Wages, Employment, and Poverty," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(2), pages 275-314, April.
    • Handle: RePEc:bla:indres:v:58:y:2019:i:2:p:275-314
    DOI: 10.1111/irel.12232
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    Cited by:

    1. Richard Gearhart & Lyudmyla Sonchak-Ardan & Raphael Thibault, 2023. "The impact of minimum wage on parental time allocation to children: evidence from the American Time Use Survey," Review of Economics of the Household, Springer, vol. 21(3), pages 1019-1042, September.
    2. Fone, Zachary S. & Sabia, Joseph J. & Cesur, Resul, 2023. "The unintended effects of minimum wage increases on crime," Journal of Public Economics, Elsevier, vol. 219(C).
    3. Nur Feriyanto & Dityawarman El Aiyubbi & Achmad Nurdany, 2020. "The Impact of Unemployment, Minimum Wage, and Real Gross Regional Domestic Product on Poverty Reduction in Provinces of Indonesia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(10), pages 1088-1099, October.
    4. Galbis, Eva Moreno, 2020. "Differences in work conditions between natives and immigrants: preferences vs. outside employment opportunities," European Economic Review, Elsevier, vol. 130(C).

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