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Is the Minimum Wage a Pull Factor for Immigrants?

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  • Giulietti, Corrado

    () (University of Southampton)

Abstract

This paper studies the impact of the minimum wage on immigration. A framework is presented in which inflows of immigrants are a function of the expected wage growth induced by the minimum wage. The analysis focuses on the US minimum wage increase of 1996 and 1997, using data from the Current Population Survey and the census. The estimation strategy consists of using the fraction of affected workers as the instrumental variable for the growth of expected wages. The findings show that States in which the growth of expected wages was relatively large (around 20%) exhibit inflow rate increases that are four to five times larger than States in which average wages grew 10% less. Placebo tests confirm that the policy did not affect the immigration of high wage earners.

Suggested Citation

  • Giulietti, Corrado, 2010. "Is the Minimum Wage a Pull Factor for Immigrants?," IZA Discussion Papers 5410, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5410
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    1. Are minimum wages attracting immigrants?
      by Economic Logician in Economic Logic on 2011-02-10 20:47:00

    More about this item

    Keywords

    wage effects; employment effects; expected wages; immigration; minimum wage;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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