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Remittances and the Wage Impact of Immigration

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This paper is the first to examine the impact of immigrant remittances on the wages of native workers in the host country. The model shows that the effect of immigration on wages depends on the ratio of an immigration-induced change in the consumer base relative to an immigration-induced change in the workforce. Remittances provide a unique way of identifying changes in this ratio since they reduce the consumer base but not the workforce. The model is then tested using an unusual data set that follows the same individuals over time and has detailed information on remittances. Consistent with the prediction of the model, the results indicate that remittances depress the wages of native workers, especially those in non-traded industries.

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File URL: http://web.williams.edu/Economics/wp/OlneyRemittancesAndWages.pdf
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Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2011-13.

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Length: 35 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:wil:wileco:2011-13

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Keywords: Remittances; Immigration; Wages;

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