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Attenuation Bias in Measuring the Wage Impact of Immigration

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  • Abdurrahman Aydemir
  • George J. Borjas

Abstract

Although economic theory predicts an inverse relation between relative wages and immigration-induced supply shifts, it has been difficult to document such effects. The weak evidence may be partly due to sampling error in a commonly used measure of the supply shift, the immigrant share of the workforce. After controlling for permanent factors that determine wages in specific labor markets, little variation remains in the immigrant share. We find significant sampling error in this measure of supply shifts in Canadian and U.S. Census data. Correcting for the resulting attenuation bias can substantially increase existing estimates of the wage impact of immigration.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16229.

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Date of creation: Jul 2010
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Publication status: published as Abdurrahman Aydemir & George J. Borjas, 2011. "Attenuation Bias in Measuring the Wage Impact of Immigration," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 69-113, 01.
Handle: RePEc:nbr:nberwo:16229

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  1. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 451-477, 07.
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  8. Randall Filer, 1992. "The Effect of Immigrant Arrivals on Migratory Patterns of Native Workers," NBER Chapters, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 245-270 National Bureau of Economic Research, Inc.
  9. Ethan Lewis, 2005. "Immigration, Skill Mix, and the Choice of Technique," Working Papers 05-04, Center for Economic Studies, U.S. Census Bureau.
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