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Preprints, Working Papers, ... Year : 2015

Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis

Joan Monras
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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 force in high-immigration years. A simple quantitative many-region model allows me to obtain the counterfactual local wage evolution absent the immigration shock.
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hal-01127022 , version 1 (06-03-2015)

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Joan Monras. Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis. 2015. ⟨hal-01127022⟩
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