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Substitution Between Immigrants, Natives, and Skill Groups

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  • George J. Borjas
  • Jeffrey Grogger
  • Gordon H. Hanson

Abstract

The wage impact of immigration depends crucially on the elasticity of substitution between similarly skilled immigrants and natives and the elasticity of substitution between high school dropouts and graduates. This paper revisits the estimation of these elasticities. The U.S. data indicate that equally skilled immigrants and natives are perfect substitutes. The value of the second elasticity depends on how one controls for changes in demand that have differentially affected high school dropouts and graduates. The groups are imperfect substitutes under standard trend assumptions, but even slight deviations from these assumptions can lead to an outright rejection of the CES framework.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17461.

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Date of creation: Sep 2011
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Publication status: published as “Comment: Substitution between Immigrants, Natives, and Skill Groups.” Journal of the European Economic Association, 10(1), 2012. (with George Borjas and Jeffrey Grogger)
Handle: RePEc:nbr:nberwo:17461

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Cited by:
  1. Osea Giuntella & Fabrizio Mazzonna, 2014. "Do Immigrants Bring Good Health?," SOEPpapers on Multidisciplinary Panel Data Research 653, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Francine D. Blau & Lawrence M. Kahn, 2012. "Immigration and the Distribution of Incomes," NBER Working Papers 18515, National Bureau of Economic Research, Inc.
  3. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.
  4. Tobias Stoehr, 2013. "The Returns to Occupational Foreign Language Use: Evidence from Germany," Kiel Working Papers 1880, Kiel Institute for the World Economy.

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