Immigration, Wages, and Education: a Labor Market Equilibrium Structural Model

Joan Llull

No 366, 2012 Meeting Papers from Society for Economic Dynamics

Abstract: This paper analyzes the effect of immigration on wages taking into account human capital adjustments by natives and previous immigrants. To this end, I propose and estimate a labor market equilibrium structural model. On the labor supply side, individuals make endogenous decisions on education, participation, and occupation. On the demand side, an aggregate firm uses a technology that combines labor skill units with capital to produce a single output, and accounts for skill-biased technical change. I estimate the model using U.S. micro-data for 1967-2007. Results suggest that immigration reduced wages considerably even though natives adjusted their human capital and labor supply behavior to compensate for the change in skill prices.

Date: 2012
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Related works:
Journal Article: Immigration, Wages, and Education: A Labour Market Equilibrium Structural Model (2018)
Working Paper: Immigration, Wages, and Education: A Labor Market Equilibrium Structural Model (2015)
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