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The Wage Impact of the Marielitos: Additional Evidence

Listed author(s):
  • George J. Borjas

Cardʼs (1990) study of the Mariel supply shock is an important contribution to the literature that measures the labor market impact of immigration. My recent reappraisal (Borjas, 2015) revealed that even the most cursory reexamination implied that the wage of low-skill (non-Hispanic) working men in Miami declined substantially in the years after Mariel. In the three months since the public release of my paper, there has already been one “re-reappraisal” of the evidence. Peri and Yasenov (2015) make a number of alternative methodological choices that lead them to conclude that Mariel did not have a wage impact. This paper isolates the source of the conflicting results. The main reasons for the divergence are that Peri and Yasenov calculate wage trends in a pooled sample of men and women, but ignore the contaminating effect of increasing female labor force participation. They also include non-Cuban Hispanics in the analysis, but ignore that at least a third of those Hispanics are foreign-born and arrived in the 1980s, further contaminating the calculated wage trend. And, most conspicuously, they include “workers” aged 16-18 in the sample. Because almost all of those “workers” are still enrolled in high school and lack a high school diploma, this very large population of high school students is systematically misclassified as high school dropouts. This fundamental error in data construction contaminates the analysis and helps hide the true effect of the Mariel supply shock.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 21850.

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Date of creation: Jan 2016
Handle: RePEc:nbr:nberwo:21850
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  1. Ottaviano, Gianmarco I. P. & Peri, Giovanni, 2007. "Rethinking the effects of immigration on wages," HWWI Research Papers 3-8, Hamburg Institute of International Economics (HWWI).
  2. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  3. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
  4. Hamilton, James D, 1983. "Oil and the Macroeconomy since World War II," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 228-248, April.
  5. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
  6. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
  7. Giovanni Peri & Vasil Yasenov, 2015. "The Labor Market Effects of a Refugee Wave: Applying the Synthetic Control Method to the Mariel Boatlift," NBER Working Papers 21801, National Bureau of Economic Research, Inc.
  8. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
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