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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 (26) Track citations by RSS feed

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

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