IDEAS home Printed from https://ideas.repec.org/p/acb/cbeeco/2011-544.html
   My bibliography  Save this paper

A Capital Mistake? The Neglected Effect of Immigration on Average Wages

Author

Listed:
  • Declan Trott

Abstract

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 its effect on relative wages.

Suggested Citation

  • Declan Trott, 2011. "A Capital Mistake? The Neglected Effect of Immigration on Average Wages," ANU Working Papers in Economics and Econometrics 2011-544, Australian National University, College of Business and Economics, School of Economics.
  • Handle: RePEc:acb:cbeeco:2011-544
    as

    Download full text from publisher

    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp544.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
    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. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    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. Gianmarco I.P. Ottaviano & Giovanni Peri, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," NBER Working Papers 11672, National Bureau of Economic Research, Inc.
    6. George J. Borjas, 2021. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 9, pages 235-274, World Scientific Publishing Co. Pte. Ltd..
    7. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    8. Gianmarco I. P. Ottaviano & Giovanni Peri, 2016. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 2, pages 35-80 World Scientific Publishing Co. Pte. Ltd..
    9. 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.
    10. Ottaviano, Gianmarco & Peri, Giovanni, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the US," CEPR Discussion Papers 5226, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kifle, Temesgen, 2009. "The effect of immigration on the earnings of native-born workers: Evidence from Australia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(2), pages 350-356, March.
    2. Michael Gerfin & Boris Kaiser, 2010. "The Effects of Immigration on Wages: An Application of the Structural Skill-Cell Approach," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 709-739, December.
    3. Francesco D’Amuri & Gianmarco I.P. Ottaviano & Giovanni Peri, 2021. "The labor market impact of immigration in Western Germany in the 1990s," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 8, pages 223-243, World Scientific Publishing Co. Pte. Ltd..
    4. Catalina Amuedo-Dorantes & Sara de la Rica, 2008. "Complements or Substitutes? Immigrant and Native Task Specialization in Spain," Working Papers 2008-35, FEDEA.
    5. Şule Akkoyunlu, 2012. "Intervening Opportunities and Competing Migrants in Turkish migration to Germany, 1969-2008," Migration Letters, Migration Letters, vol. 9(2), pages 155-175, May.
    6. Bodvarsson, Örn B. & Van den Berg, Hendrik F. & Lewer, Joshua J., 2008. "Measuring immigration's effects on labor demand: A reexamination of the Mariel Boatlift," Labour Economics, Elsevier, vol. 15(4), pages 560-574, August.
    7. Chletsos Michael & Roupakias Stelios, 2019. "Do Immigrants Compete with Natives in the Greek Labour Market? Evidence from the Skill-Cell Approach before and during the Great Recession," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-30, April.
    8. Hausmann, Ricardo & Nedelkoska, Ljubica, 2018. "Welcome home in a crisis: Effects of return migration on the non-migrants' wages and employment," European Economic Review, Elsevier, vol. 101(C), pages 101-132.
    9. Bernt Bratsberg & Oddbjørn Raaum & Marianne Røed & Pål Schøne, 2010. "Immigration Wage Impacts by Origin," RF Berlin - CReAM Discussion Paper Series 1030, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    10. Simonetta LONGHI & Peter NIJKAMP & Jacques POOT, 2008. "Meta-Analysis Of Empirical Evidence On The Labour Market Impacts Of Immigration," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 161-191.
    11. Gianmarco I.P. Ottaviano & Giovanni Peri, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," NBER Working Papers 11672, National Bureau of Economic Research, Inc.
    12. Gabriel Felbermayr & Wido Geis & Wilhelm Kohler, 2014. "Restrictive Immigration Policy in Germany: Pains and Gains Foregone?," World Scientific Book Chapters, in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 12, pages 395-419, World Scientific Publishing Co. Pte. Ltd..
    13. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 3, pages 81-115 World Scientific Publishing Co. Pte. Ltd..
    14. Bernhard H. Wittek & Samuel Muehlemann, 2021. "The consequences of EU eastern enlargement on human capital accumulation and wages in Germany," Economics of Education Working Paper Series 0184, University of Zurich, Department of Business Administration (IBW).
    15. Kugler, Adriana & Yuksel, Mutlu, 2008. "Effects of Low-Skilled Immigration on U.S. Natives: Evidence from Hurricane Mitch," IZA Discussion Papers 3670, Institute of Labor Economics (IZA).
    16. González, Libertad & Ortega, Francesc, 2011. "How do very open economies adjust to large immigration flows? Evidence from Spanish regions," Labour Economics, Elsevier, vol. 18(1), pages 57-70, January.
    17. Amuedo-Dorantes, Catalina & de la Rica, Sara, 2011. "Complements or substitutes? Task specialization by gender and nativity in Spain," Labour Economics, Elsevier, vol. 18(5), pages 697-707, October.
    18. Kabir, Kayenat & Keeney, Roman M., 2017. "Modeling undocumented migration from Mexico to the United States – A structural examination of available information and options for analysis," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258376, Agricultural and Applied Economics Association.
    19. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    20. Emily Gu & Chad Sparber, 2017. "The Native-Born Occupational Skill Response to Immigration within Education and Experience Cells," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(3), pages 426-450, June.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:acb:cbeeco:2011-544. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/feanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.