Immigration and Prices: Quasi-Experimental Evidence from Syrian Refugees in Turkey

Binnur Balkan and Semih Tumen

No 9642, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We exploit the regional variation in the unexpected (or forced) inflow of Syrian refugees as a natural experiment to estimate the impact of immigration on consumer prices in Turkey. Using a difference-in- differences strategy and a comprehensive data set on the regional prices of CPI items, we find that general level of consumer prices has declined by approximately 2.5 percent due to immigration. Prices of goods and services have declined in similar magnitudes. We highlight that the channel through which the price declines take place is the informal labor market. Syrian refugees supply inexpensive informal labor and, thus, substitute the informal native workers especially in informal labor intensive sectors. We document that prices in these sectors have fallen by around 4 percent, while the prices in the formal labor intensive sectors have almost remained unchanged. Increase in the supply of informal immigrant workers generates labor cost advantages and keeps prices lower in the informal labor intensive sectors.

Keywords: informal employment; natural experiment; Syrian refugees; consumer prices; immigration (search for similar items in EconPapers)
JEL-codes: C21 E31 J46 J61 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2016-01
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-iue, nep-mac, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (76)

Published - published in: Journal of Population Economics, 2016, 29(3), 657-686

Downloads: (external link)
https://docs.iza.org/dp9642.pdf (application/pdf)

Related works:
Journal Article: Immigration and prices: quasi-experimental evidence from Syrian refugees in Turkey (2016)
Working Paper: Immigration and Prices: Quasi-Experimental Evidence from Syrian Refugees in Turkey (2016)
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:iza:izadps:dp9642

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().