2020
DOI: 10.1086/707764
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Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis

Abstract: How does the US labor market absorb low-skilled immigration? I address this question using the 1995 Mexican Peso Crisis, an exogenous push factor that raised Mexican migration to the US. In the short run, high-immigration states see their low-skilled labor force increase and native low-skilled wages decrease, with an implied local labor demand elasticity of-.7. Internal relocation dissipates this shock spatially. In the long run, the only lasting consequences are for low-skilled natives who entered the labor f… Show more

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Cited by 123 publications
(111 citation statements)
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References 71 publications
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“…The regional wages of native workers thus returned to their pre-shock level 15 years after. As emphasized in Section 2.2, this rate of adjustment is consistent with several studies indicating that regional wage adjustments to local shocks generally take more than a decade (Blanchard et al, 1992;Borjas, 2016;Amior and Manning, 2015;Monras, 2015a;Ruist et al, 2017).…”
Section: Comparison With Other Studiessupporting
confidence: 88%
See 1 more Smart Citation
“…The regional wages of native workers thus returned to their pre-shock level 15 years after. As emphasized in Section 2.2, this rate of adjustment is consistent with several studies indicating that regional wage adjustments to local shocks generally take more than a decade (Blanchard et al, 1992;Borjas, 2016;Amior and Manning, 2015;Monras, 2015a;Ruist et al, 2017).…”
Section: Comparison With Other Studiessupporting
confidence: 88%
“…These correlations indicate an "own" wage elasticity to immigration of between -0.78 and -1.10, implying that a 1 percent increase in the workforce due to the inflow of repatriates within a region-skill group reduces the wage of natives in that group by 0.8 to 1.1 percent. This wage elasticity is similar to the one found by Llull (2017); Monras (2015a) after instrumentation for the U.S., Edo (2016) for France when focusing on native workers covered by fixed-term contracts and Borjas and Monras (2016) when revisiting the wage impact of the Mariel Boatlift.…”
Section: Preliminary Analysis Figure 3 Provides a Preliminary Look Asupporting
confidence: 81%
“…The …rst one is economic in nature, and argues that political discontent emerges from the negative e¤ect of immigration on natives' employment and wages. 1 While this idea is consistent with …ndings in , Dustmann et al (2017), and Monras (2018) among others, it is in contrast with results in Card (2001Card ( , 2005, Foged and Peri (2016), and who document that immigrants have a negligible, or even positive, impact on natives' earnings. 2 The second hypothesis is that natives'backlash has cultural roots.…”
Section: Introductionsupporting
confidence: 76%
“…This strategy increases the number of observations per skill-cell, reducing potential attenuation bias. Even after instrumenting and correcting for attenuation bias, there could still be an upward bias in the estimation of the immigration impact due to the fact that natives may react to immigration by moving to other states, which creates a diffusion effect of the impact of immigration across the entire economy (Borjas, 2006;Monras, 2015). While we are unable to correct for this additional potential source of upward bias, we are able to estimate the extent of "native flight".…”
mentioning
confidence: 88%