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Immigration, Wages, and Education: A Labor Market Equilibrium Structural Model

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  • Joan Llull

Abstract

This paper analyzes the effect of immigration on wages taking into account human capital and labor supply adjustments. Using U.S. micro-data for 1967-2007, I estimate a labor market equilibrium model that includes endogenous decisions on education, participation, and occupation, and allows for skill-biased technical change. Results suggest important labor market adjustments that mitigate the effect of immigration on wages. These adjustments include career switches, labor market detachment and changes in schooling decisions, and are heterogeneous across the workforce. The adjustments generate substantial self-selection biases at the lower tail of the wage distribution that are corrected by the estimated model.

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  • Joan Llull, 2013. "Immigration, Wages, and Education: A Labor Market Equilibrium Structural Model," Working Papers 711, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:711
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    More about this item

    Keywords

    Immigration; wages; human capital; labor supply; dynamic discrete choice; labor market equilibrium;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • 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

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