Cover: The Dynamics of Immigration and Wages

The Dynamics of Immigration and Wages

Published May 10, 2010

by Silvia Helena Barcellos

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There is considerable debate in the literature about the effects of immigration on workers' labor market outcomes. This paper presents a new approach to the analysis of the relationship between immigration and wages based on a panel vector autoregression (VAR). The VAR analysis of a panel of US states shows that immigration does not have a significant effect on wages or internal migration. By contrast, wages do affect immigration: a 10 percent increase in wages causes up to a 20 percent increase in immigrant inflow. The effect is strongest for low-skill immigrants while it is small and insignificant for high-skill immigrants.

This paper series was made possible by the NIA funded RAND Center for the Study of Aging and the NICHD funded RAND Population Research Center.

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