Dynamic Responses to Immigration

Abstract

I analyze the dynamic effects of immigration by estimating an equilibrium model of local labor markets in the US. The model includes firms in multiple cities and sectors which combine capital, skilled and unskilled labor in production, and forward-looking workers who choose their sector and location each period as a dynamic discrete choice. A counterfactual unskilled immigration inflow leads to an initial wage drop for unskilled workers and a wage increase for skilled workers. These effects dissipate rapidly as unskilled workers migrate away from heavily affected cities and workers shift toward unskilled intensive industries. Effects on lifetime utility are small. JEL Classification: J31, J61, J2

The Impact of Immigration on Wage Dynamics: Evidence from the Algerian Independence War

“…Mass migration to France started after 18 By exploiting the large inflow of Mexican immigrants to the U.S. in 1995, Monras (2015a) also finds that the negative wage response to this supply shock for low skilled native workers at the State level tended to lessen during the four subsequent years (from 1996 to 1999). See also the contributions by Braun and Weber (2016); Colas (2016) who respectively analyze the dynamic effects of local labor supply shocks on the German and U.S. labor markets by using a dynamic model of regional labor markets.…”

The Impact of Immigration on Wage Dynamics: Evidence from the Algerian Independence War

“…By exploiting the large inflow of Mexican immigrants to the U.S. in 1995, Monras (2015a) also finds that the negative wage response to this supply shock for low skilled native workers at the State level tended to lessen during the four subsequent years(from 1996 to 1999). See also the contributions byBraun and Weber (2016);Colas (2016) who respectively analyze the dynamic effects of local labor supply shocks on the German and U.S. labor markets by using a dynamic model of regional labor markets.…”

The Indirect Fiscal Benefits of Low-Skilled Immigration

“…More structural approaches have been taken in the literature more recently, e.g. by Llull (2018) who considers endogenous responses of workers along the occupation and education margin, by Bound, Braga, Golden, and Khanna (2015) who consider major and occupation choice responses of skilled natives, by Monras (2020) who considers a dynamic spatial equilibrium model, and by Colas (2019) who also considers sectoral choices of natives.…”