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Foreign visa salary requirement and natives’ reservation wages

Author

Listed:
  • Zahra Murad

    (University of Portsmouth)

  • Robert Dowell

    (Funding Circle)

Abstract

We study whether reservation wages of native workers are affected by the information about visa salary requirements for foreign workers. We conduct two experiments to test the hypothesis, a survey experiment on university students and an incentivized experiment with workers on an online labour platform. We find that native workers’ reservation wages are higher when exposed to a high than low visa salary requirement for foreign workers. We test for several mechanisms behind this finding. Our results can partly be explained by the visa salary requirement information acting as an anchor reference point for fair wage perceptions which in turn affects reservation wages. Our results highlight the importance of unintended consequences of immigration policies on local labour markets.

Suggested Citation

  • Zahra Murad & Robert Dowell, 2020. "Foreign visa salary requirement and natives’ reservation wages," Working Papers in Economics & Finance 2020-06, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    • Handle: RePEc:pbs:ecofin:2020-06
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    More about this item

    Keywords

    reservation wages; fair wages; visa salary requirement; immigration policy; experiment;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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