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Is the Minimum Wage a Pull Factor for Immigrants?

Corrado Giulietti ()

No 5410, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: wage effects; employment effects; expected wages; immigration; minimum wage (search for similar items in EconPapers)
JEL-codes: J08 J23 J38 J61 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2010-12
New Economics Papers: this item is included in nep-lab and nep-mig
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Published - substantially revised version published in: Industrial and Labor Relations Review, 2014, 67 (3), 649-674. Pre-publication version available here

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