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Immigrants at the Margin: Labor Market Effects of the Minimum Wage

Author

Listed:
  • Mark Borgschulte
  • Heepyung Cho
  • Darren Lubotsky

Abstract

We examine the differential effects of minimum wages on immigrant and native workers in the United States. We find that minimum wage increases lead to reduced hours of work among immigrants with no effect on their employment. The effects are concentrated among recently-arrived, likely-undocumented workers in high turnover industries. Native workers show no such response, even when examining native subgroups with similar characteristics to the most affected immigrants. We conclude that affected immigrant labor markets feature low-surplus, low-investment employment relationships with flexible hours, but they are embedded in labor markets where replacement is unusually costly.

Suggested Citation

  • Mark Borgschulte & Heepyung Cho & Darren Lubotsky, 2026. "Immigrants at the Margin: Labor Market Effects of the Minimum Wage," RFBerlin Discussion Paper Series 26103, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:26103
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    Keywords

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    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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