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A capital mistake? The neglected effect of immigration on average wages

  • Declan Trott

Much recent literature on the wage effects of immigration assumes that the return to capital, and therefore the average wage, is unaffected in the long run. If immigration is modelled as a continuous flow rather than a one-off shock, this result does not necessarily hold. A simple calibration with pre-crisis US immigration rates gives a reduction in average wages of 5%, larger than most estimates of the effect on relative wages.

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File URL: http://hdl.handle.net/10.1080/13504851.2011.607116
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Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 19 (2012)
Issue (Month): 9 (June)
Pages: 873-876

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Handle: RePEc:taf:apeclt:v:19:y:2012:i:9:p:873-876
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  1. 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.
  2. George J. Borjas & Lawrence F. Katz, 2007. "The Evolution of the Mexican-Born Workforce in the United States," NBER Chapters, in: Mexican Immigration to the United States, pages 13-56 National Bureau of Economic Research, Inc.
  3. Ottaviano, Gianmarco I. P. & Peri, Giovanni, 2007. "Rethinking the effects of immigration on wages," HWWI Research Papers 3-8, Hamburg Institute of International Economics (HWWI).
  4. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 869-924, December.
  5. Abdurrahman Aydemir & George J. Borjas, 2006. "A Comparative Analysis of the Labor Market Impact of International Migration: Canada, Mexico, and the United States," NBER Working Papers 12327, National Bureau of Economic Research, Inc.
  6. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," Working Papers 633, Princeton University, Department of Economics, Industrial Relations Section..
  7. Gianmarco I.P. Ottaviano & Giovanni Peri, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," NBER Working Papers 14188, National Bureau of Economic Research, Inc.
  8. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
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