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Who benefits from the minimum wage--natives or migrants?

Author

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  • Madeline Zavodny

    (Agnes Scott College, USA, and IZA, Germany)

Abstract

According to economic theory, a minimum wage reduces the number of low-wage jobs and increases the number of available workers, allowing greater hiring selectivity. More competition for a smaller number of low-wage jobs will disadvantage immigrants if employers perceive them as less skilled than native-born workers--and vice versa. Studies indicate that a higher minimum wage does not hurt immigrants, but there is no consensus on whether immigrants benefit at the expense of natives. Studies also reach disparate conclusions on whether higher minimum wages attract or repel immigrants.

Suggested Citation

  • Madeline Zavodny, 2014. "Who benefits from the minimum wage--natives or migrants?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-98, December.
    • Handle: RePEc:iza:izawol:journl:y:2014:n:98
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    References listed on IDEAS

    as
    1. David A. Jaeger, 2007. "Green Cards and the Location Choices of Immigrants in the United States, 1971–2000," Research in Labor Economics, in: Immigration, pages 131-183, Emerald Group Publishing Limited.
    2. Cadena, Brian C., 2014. "Recent immigrants as labor market arbitrageurs: Evidence from the minimum wage," Journal of Urban Economics, Elsevier, vol. 80(C), pages 1-12.
    3. Cortes, Kalena E., 2004. "Wage Effects on Immigrants from an Increase in the Minimum Wage Rate: An Analysis by Immigrant Industry Concentration," IZA Discussion Papers 1064, Institute of Labor Economics (IZA).
    4. Corrado Giulietti, 2014. "Is the Minimum Wage a Pull Factor for Immigrants?," ILR Review, Cornell University, ILR School, vol. 67(3_suppl), pages 649-674, May.
    5. 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 13-194, W.E. Upjohn Institute for Employment Research.
    6. Alida Castillo-Freeman & Richard B. Freeman, 1992. "When the Minimum Wage Really Bites: The Effect of the U.S.-Level Minimum on Puerto Rico," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 177-212, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Edo, Anthony & Rapoport, Hillel, 2019. "Minimum wages and the labor market effects of immigration," Labour Economics, Elsevier, vol. 61(C).

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    More about this item

    Keywords

    minimum wage; immigrants; low-skilled workers;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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