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Minimum Wages and the Labor Market Effects of Immigration

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  • Anthony Edo
  • Hillel Rapoport

Abstract

This paper exploits the non-linearity in the level of minimum wages across U.S. States created by the coexistence of federal and state regulations to investigate how the prevalence of minimum wages affects the labor market impact of immigration. We find that the effects of immigration on the wages and employment of native workers within a given state-skill cell are more negative in U.S. States with low minimum wages (i.e., where the federal minimum wage is binding). The results are robust to instrumenting immigration and state effective minimum wages, and to implementing a difference-in-differences approach comparing U.S. States where effective minimum wages are fully determined by the federal minimum wage over the whole period considered (2000-2013) to U.S. States where this is never the case. This paper thus underlines the important role played by minimum wages in mitigating any adverse labor market effects of low-skill immigration.

Suggested Citation

  • Anthony Edo & Hillel Rapoport, 2017. "Minimum Wages and the Labor Market Effects of Immigration," Working Papers 2017-12, CEPII research center.
  • Handle: RePEc:cii:cepidt:2017-12
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    1. Orrenius, Pia M. & Zavodny, Madeline, 2007. "Does immigration affect wages? A look at occupation-level evidence," Labour Economics, Elsevier, vol. 14(5), pages 757-773, October.
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    Cited by:

    1. Anthony Edo & Yvonne Giesing & Jonathan Öztunc & Panu Poutvaara, 2017. "Immigration and Electoral Support for the Far Left and the Far Right," ifo Working Paper Series 244, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

    More about this item

    Keywords

    immigration; minimum wages; labor markets;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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