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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 - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

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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    2. Christian Dustmann & Hyejin Ku & Tanya Surovtseva, 2021. "Real Exchange Rates and the Earnings of Immigrants," CReAM Discussion Paper Series 2110, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    3. Foged, Mette & Hasager, Linea & Yasenov, Vasil, 2019. "The Role of Institutions in the Labor Market Impact of Immigration," SocArXiv 3aj4n, Center for Open Science.
    4. 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.
    5. Robert E. Hall & Marianna Kudlyak, 2021. "Why Has the US Economy Recovered So Consistently from Every Recession in the Past 70 Years?," NBER Chapters, in: NBER Macroeconomics Annual 2021, volume 36, National Bureau of Economic Research, Inc.
    6. 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.
    7. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    8. Amior, Michael, 2018. "The contribution of foreign migration to local labor market adjustment," LSE Research Online Documents on Economics 91705, London School of Economics and Political Science, LSE Library.
    9. 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.
    10. Adam Levai & Riccardo Turati, "undated". "The Impact of Immigration on Workers’ Protection," LIDAM Discussion Papers IRES 2021021, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 07 Sep 2021.
    11. Ciorbagiu Ioana & Stoica Adrian & Mihaila Monica, 2020. "Life Satisfaction and Migration - What Relationship?," Journal of Social and Economic Statistics, Sciendo, vol. 9(1), pages 105-127, August.

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    More about this item

    Keywords

    Immigration; Minimum wages; Labor markets;
    All these keywords.

    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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