Working Paper: NBER ID: w12327
Authors: Abdurrahman Aydemir; George J. Borjas
Abstract: Using data drawn from the Canadian, Mexican, and U.S. Censuses, we find a numerically comparable and statistically significant inverse relation between immigrant-induced shifts in labor supply and wages in each of the three countries: A 10 percent labor supply shift is associated with a 3 to 4 percent opposite-signed change in wages. Despite the similarity in the wage response, the impact of migration on the wage structure differs significantly across countries. International migration narrowed wage inequality in Canada; increased it in the United States; and reduced the relative wage of workers at the bottom of the skill distribution in Mexico.
Keywords: International Migration; Labor Market Impact; Wages; Inequality
JEL Codes: J31; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 10 percent increase in labor supply due to immigration (J69) | 3 to 4 percent decrease in wages (J39) |
| immigration (F22) | narrowing wage inequality in Canada (D31) |
| immigration (F22) | increasing wage inequality in the U.S. (J31) |
| immigration (F22) | reduction in relative wage of low-skill workers in Mexico (F66) |
| higher immigration rates (J11) | higher wages at destination and lower wages at source (F16) |
| impact of immigration varies significantly across different skill groups (F66) | different wage dynamics (J31) |