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The Effect of Minimum Wages on Immigrants’ Employment and Earnings

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Author Info

  • Orrenius, Pia M.

    ()
    (Federal Reserve Bank of Dallas)

  • Zavodny, Madeline

    ()
    (Agnes Scott College)

Abstract

This study examines how minimum wage laws affect the employment and earnings of low-skilled immigrants and natives in the U.S. Minimum wage increases might have larger effects among low-skilled immigrants than among natives because, on average, immigrants earn less than natives due to lower levels of education, limited English skills, and less social capital. Results based on data from the Current Population Survey for the years 1994-2005 do not indicate that minimum wages have adverse employment effects among adult immigrants or natives who did not complete high school. However, low-skilled immigrants may have been discouraged from settling in states that set wage floors substantially above the federal minimum.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3499.

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Length: 43 pages
Date of creation: May 2008
Date of revision:
Publication status: published in: Industrial and Labor Relations Review, 2008, 61 (4), 544-563
Handle: RePEc:iza:izadps:dp3499

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Keywords: minimum wage; low-skilled; immigrants;

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References

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  1. David Neumark & DMark Schweitzer & DaWilliam Wascher, 2004. "Minimum Wage Effects throughout the Wage Distribution," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
  2. Burkhauser, Richard V & Couch, Kenneth A & Wittenburg, David C, 2000. "A Reassessment of the New Economics of the Minimum Wage Literature with Monthly Data from the Current Population Survey," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 18(4), pages 653-80, October.
  3. Giovanni Peri & Gianmarco I.P. Ottaviano, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," Working Papers 58, University of California, Davis, Department of Economics.
  4. Kenneth A. Couch & David C. Wittenburg, 2001. "The Response of Hours of Work to Increases in the Minimum Wage," Southern Economic Journal, Southern Economic Association, vol. 68(1), pages 171-177, July.
  5. Robert F. Schoeni, 1998. "Labor market assimilation of immigrant women," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(3), pages 483-504, April.
  6. David Neumark & William Wascher, 1995. "The Effects of Minimum Wages on Teenage Employment and Enrollment: Evidence from Matched CPS Surveys," NBER Working Papers 5092, National Bureau of Economic Research, Inc.
  7. Pia M. Orrenius & Genevieve R. Solomon, 2006. "How labor market policies shape immigrants’ opportunities," Economic Letter, Federal Reserve Bank of Dallas, vol. 1(jul).
  8. Kristin F. Butcher & John DiNardo, 1998. "The Immigrant and Native-born Wage Distributions: Evidence from United States Censuses," NBER Working Papers 6630, National Bureau of Economic Research, Inc.
  9. 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 for the Study of Labor (IZA).
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  17. Baker, Michael & Benjamin, Dwayne & Stanger, Shuchita, 1999. "The Highs and Lows of the Minimum Wage Effect: A Time-Series Cross-Section Study of the Canadian Law," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 17(2), pages 318-50, April.
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Citations

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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 13-194, W.E. Upjohn Institute for Employment Research.
  2. Eva Lajtkepová, 2010. "Minimum Wage and Labour Market," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2010(1), pages 3-20.
  3. Kahanec, Martin, 2013. "Skilled labor flows : lessons from the European Union," Social Protection Discussion Papers 75529, The World Bank.
  4. 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.
  5. Kahanec, Martin, 2012. "Report No. 49: Skilled Labor Flows: Lessons from the European Union," IZA Research Reports 49, Institute for the Study of Labor (IZA).
  6. Jonathan Meer & Jeremy West, 2013. "Effects of the Minimum Wage on Employment Dynamics," NBER Working Papers 19262, National Bureau of Economic Research, Inc.
  7. Sen, Anindya & Rybczynski, Kathleen & Van De Waal, Corey, 2011. "Teen employment, poverty, and the minimum wage: Evidence from Canada," Labour Economics, Elsevier, vol. 18(1), pages 36-47, January.

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