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Immigration, Wages, and Education: A Labor Market Equilibrium Structural Model

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  • Joan Llull

Abstract

This paper analyzes the effect of immigration on wages taking into account human capital and labor supply adjustments. Using U.S. micro-data for 1967-2007, I estimate a labor market equilibrium model that includes endogenous decisions on education, participation, and occupation, and allows for skill-biased technical change. Results suggest important labor market adjustments that mitigate the effect of immigration on wages. These adjustments include career switches, labor market detachment and changes in schooling decisions, and are heterogeneous across the workforce. The adjustments generate substantial self-selection biases at the lower tail of the wage distribution that are corrected by the estimated model.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 711.

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Date of creation: Sep 2013
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Handle: RePEc:bge:wpaper:711

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Keywords: immigration; wages; human capital; labor supply; dynamic discrete choice; labor market equilibrium;

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Cited by:
  1. Jennifer Hunt, 2012. "The Impact of Immigration on the Educational Attainment of Natives," NBER Working Papers 18047, National Bureau of Economic Research, Inc.
  2. Sara de la Rica & Albretch Glitz & Francesc Ortega, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," Working Papers 2013-16, FEDEA.

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