The Effect of Low-Skilled Immigration on U.S. Prices: Evidence from CPI Data
AbstractI exploit the large variation across U.S. cities and through time in the relative size of the low-skilled immigrant population to estimate the causal effect of immigration on prices of nontraded goods and services. Using an instrumental variables strategy, I find that, at current immigration levels, a 10 percent increase in the share of low-skilled immigrants in the labor force decreases the price of immigrant-intensive services, such as housekeeping and gardening, by 2 percent. Wage equations suggest that lower wages are a likely channel through which these effects take place. However, wage effects are significantly larger for low-skilled immigrants than for low-skilled natives, implying that the two are imperfect substitutes. (c) 2008 by The University of Chicago. All rights reserved..
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 116 (2008)
Issue (Month): 3 (06)
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