Immigration, Wages, and Education: A Labour Market Equilibrium Structural Model

Joan Llull

The Review of Economic Studies, 2018, vol. 85, issue 3, 1852-1896

Abstract: Recent literature analysing wage effects of immigration assumes labour supply is fixed across education-experience cells. This article departs from this assumption estimating a labour market equilibrium dynamic discrete choice model on U.S. micro-data for 1967–2007. Individuals adjust to immigration by changing education, participation, and/or occupation. Adjustments are heterogeneous: 4.2–26.2% of prime-aged native males change their careers; of them, some switch to white-collar careers and increase education by about three years; others reduce labour market attachment and reduce education also by about three years. These adjustments mitigate initial effects on wages and inequality. Natives that are more similar to immigrants are the most affected on impact, but also have a larger margin to adjust and differentiate. Adjustments also produce a self-selection bias in the estimation of wage effects at the lower tail of the distribution, which the model corrects.

Keywords: Immigration; Wages; Human Capital; Labor Supply; Dynamic Discrete Choice; Labor Market Equilibrium (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (79)

Downloads: (external link)
http://hdl.handle.net/10.1093/restud/rdx053 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Immigration, Wages, and Education: A Labor Market Equilibrium Structural Model (2015)
Working Paper: Immigration, Wages, and Education: a Labor Market Equilibrium Structural Model (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:85:y:2018:i:3:p:1852-1896.

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().