Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130340
Authors: 
Balkan, Binnur
Tumen, Semih
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9642
Abstract: 
We exploit the regional variation in the unexpected (or forced) inflow of Syrian refugees as a natural experiment to estimate the impact of immigration on consumer prices in Turkey. Using a difference-in- differences strategy and a comprehensive data set on the regional prices of CPI items, we find that general level of consumer prices has declined by approximately 2.5 percent due to immigration. Prices of goods and services have declined in similar magnitudes. We highlight that the channel through which the price declines take place is the informal labor market. Syrian refugees supply inexpensive informal labor and, thus, substitute the informal native workers especially in informal labor intensive sectors. We document that prices in these sectors have fallen by around 4 percent, while the prices in the formal labor intensive sectors have almost remained unchanged. Increase in the supply of informal immigrant workers generates labor cost advantages and keeps prices lower in the informal labor intensive sectors.
Subjects: 
immigration
consumer prices
Syrian refugees
natural experiment
informal employment
JEL: 
C21
E31
J46
J61
Document Type: 
Working Paper

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