Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/51686 
Year of Publication: 
2010
Series/Report no.: 
IZA Discussion Papers No. 5410
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
This paper studies the impact of the minimum wage on immigration. A framework is presented in which inflows of immigrants are a function of the expected wage growth induced by the minimum wage. The analysis focuses on the US minimum wage increase of 1996 and 1997, using data from the Current Population Survey and the census. The estimation strategy consists of using the fraction of affected workers as the instrumental variable for the growth of expected wages. The findings show that States in which the growth of expected wages was relatively large (around 20%) exhibit inflow rate increases that are four to five times larger than States in which average wages grew 10% less. Placebo tests confirm that the policy did not affect the immigration of high wage earners.
Subjects: 
employment effects
expected wages
immigration
minimum wage
wage effects
JEL: 
J08
J23
J38
J61
Document Type: 
Working Paper

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