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Minimum wages and the labor market effects of immigration

Author

Listed:
  • Anthony Edo

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

  • Hillel Rapoport

    (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

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 the labor market effects of immigration. We find that the impact of immigration on the wages and employment of native workers within a given state-skill cell is more negative in States with low minimum wages and for workers with low education and experience. That is, the minimum wage tends to protect native workers from competition induced by low-skill immigration. The results are robust to instrumenting immigration and state effective minimum wages, and to implementing a difference-in-differences approach comparing States where effective minimum wages are fully determined by the federal minimum wage to States where this is never the case.

Suggested Citation

  • Anthony Edo & Hillel Rapoport, 2019. "Minimum wages and the labor market effects of immigration," PSE-Ecole d'économie de Paris (Postprint) halshs-02301124, HAL.
  • Handle: RePEc:hal:pseptp:halshs-02301124
    DOI: 10.1016/j.labeco.2019.101753
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-02301124
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    Cited by:

    1. Edo, Anthony & Giesing, Yvonne & Öztunc, Jonathan & Poutvaara, Panu, 2019. "Immigration and electoral support for the far-left and the far-right," European Economic Review, Elsevier, vol. 115(C), pages 99-143.
    2. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr, 2018. "The Effects of Immigration in Developed Countries: Insights from Recent Economic Research," CEPII Policy Brief 2018-22, CEPII research center.
    3. George Economides & Pantelis Kammas & Thomas Moutos, 2020. "On the Interaction between Minimum Wage Adoption and Fiscal Redistribution: A Theoretical and Empirical Investigation," CESifo Working Paper Series 8355, CESifo.
    4. Michael Amior, 2018. "The Contribution of Foreign Migration to Local Labor Market Adjustment," CEP Discussion Papers dp1582, Centre for Economic Performance, LSE.

    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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