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Recent immigrants as labor market arbitrageurs: Evidence from the minimum wage

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  • Cadena, Brian C.

Abstract

This paper investigates the local labor supply effects of changes to the minimum wage by examining the response of low-skilled immigrants’ location decisions. Canonical models emphasize the importance of labor mobility when evaluating the employment effects of the minimum wage; yet few studies address this outcome directly. Low-skilled immigrant populations shift toward labor markets with stagnant minimum wages, and this result is robust to a number of alternative interpretations. This mobility provides behavior-based evidence in favor of a non-trivial negative employment effect of the minimum wage. Further, it reduces the estimated demand elasticity using teens; employment losses among native teens are substantially larger in states that have historically attracted few immigrant residents.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 80 (2014)
Issue (Month): C ()
Pages: 1-12

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Handle: RePEc:eee:juecon:v:80:y:2014:i:c:p:1-12

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Web page: http://www.elsevier.com/locate/inca/622905

Related research

Keywords: Minimum wage; Immigration; Labor mobility; Spatial equilibrium;

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References

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Cited by:
  1. Anita Alves Pena, 2013. "Do Minimum Wage Laws Affect People Who Are Not Covered? Evidence from Documented and Undocumented, Hourly and Piece Rate Workers in U.S. Agriculture," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research 13-194, W.E. Upjohn Institute for Employment Research.

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