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The Labor Market Effects of Immigration and Emigration in OECD Countries

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Author Info

  • Docquier, Frédéric

    ()
    (Université catholique de Louvain)

  • Ozden, Caglar

    ()
    (World Bank)

  • Peri, Giovanni

    ()
    (University of California, Davis)

Abstract

In this paper, we simulate the labor market effects of net immigration and emigration during the 1990's in all OECD countries. To accomplish this, we are the first to employ a comprehensive database of migrant stocks, grouped by education level and country of origin/destination, for the years 1990 and 2000. Due to the much higher international mobility of college graduates, relative to all other individuals, we find that net migration flows are college-intensive, relative to the population of non-migrants. Using the consensus aggregate model of labor demand and supply we simulate the long-run employment and wage effects of immigration and emigration. We use a range of parameter values spanning most of the estimates in the literature. In all cases we find that immigration had a positive effect on the wage of less educated natives. It also increased or left the average native wages unchanged and had a positive or no effect on native employment. To the contrary, emigration had a negative effect on the wage of less educated native workers and it contributed to increase within country inequality in all OECD countries. These results still hold true when we correct for the estimates of undocumented immigrants, for the skill-downgrading of immigrants, when we focus on immigration from non-OECD countries, and when we consider preliminary measures of more recent immigration flows for the period 2000-2007.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6258.

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Length: 54 pages
Date of creation: Dec 2011
Date of revision:
Publication status: forthcoming in: Economic Journal, 2014
Handle: RePEc:iza:izadps:dp6258

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Related research

Keywords: average wage; wage inequality; schooling externalities; complementarity; immigration and emigration;

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References

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  1. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
  2. Mattoo, Aaditya & Neagu, Ileana Cristina & Özden, Çaglar, 2008. "Brain waste? Educated immigrants in the US labor market," Journal of Development Economics, Elsevier, vol. 87(2), pages 255-269, October.
  3. Docquier, Frédéric & Marfouk, Abdeslam & Özden, Caglar & Parsons, Christopher, 2011. "Geographic, Gender and Skill Structure of International Migration," MPRA Paper 47917, University Library of Munich, Germany.
  4. Tommaso Frattini, 2012. "Immigrazione," Rivista di Politica Economica, SIPI Spa, issue 3, pages 363-407, July-Sept.
  5. Sari Pekkala, 2005. "Economic Impacts of Immigration: A Survey," Discussion Papers 362, Government Institute for Economic Research Finland (VATT).
  6. Jess Benhabib & Mark Spiegel, 2002. "Human capital and technology diffusion," Proceedings, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco, issue Nov.
  7. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
  8. Francesco Caselli & Gerardo Esquivel & Fernando Lefort, 1997. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Working Papers Central Bank of Chile 03, Central Bank of Chile.
  9. Frédéric Docquier & B. Lindsay Lowell & Abdeslam Marfouk, 2009. "A Gendered Assessment of Highly Skilled Emigration," Population and Development Review, The Population Council, Inc., The Population Council, Inc., vol. 35(2), pages 297-321.
  10. Enrico Moretti, 2002. "Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data," NBER Working Papers 9108, National Bureau of Economic Research, Inc.
  11. Jeffrey Grogger & Gordon H. Hanson, 2008. "Income Maximization and the Selection and Sorting of International Migrants," NBER Working Papers 13821, National Bureau of Economic Research, Inc.
  12. Flood, Lennart & MaCurdy, Thomas, 1992. "Work disincentive effects of taxes: An empirical analysis of Swedish men," Carnegie-Rochester Conference Series on Public Policy, Elsevier, Elsevier, vol. 37(1), pages 239-277, December.
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Blog mentions

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  1. Efficiency vs sanctity
    by chris dillow in Stumbling and Mumbling on 2012-10-07 12:06:06
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Cited by:
  1. Ethan Lewis & Giovanni Peri, 2014. "Immigration and the Economy of Cities and Regions," NBER Working Papers 20428, National Bureau of Economic Research, Inc.
  2. Protte, Benjamin, 2012. "How does Economic Integration Change Personal Income Taxation? Evidence from a new Index of Potential Labor Mobility," Working Papers 12-20, University of Mannheim, Department of Economics.

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