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Minimum Wages and the Labor Market Effects of Immigration

Author

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  • Edo, Anthony

    () (CEPII, Paris)

  • Rapoport, Hillel

    () (Paris School of Economics)

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

  • Edo, Anthony & Rapoport, Hillel, 2018. "Minimum Wages and the Labor Market Effects of Immigration," IZA Discussion Papers 11778, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11778
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    References listed on IDEAS

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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," Working Papers 2017-20, CEPII research center.

    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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