Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228420
Authors: 
Yasenov, Vasil I.
Year of Publication: 
2020
Series/Report no.: 
Upjohn Institute Working Paper No. 20-320
Abstract: 
A large body of literature estimates the relative wage impacts of immigration on low- and high-skill natives, but it is unclear how these effects map onto changes of the wage distribution. I document the movement of foreign-born workers in the U.S. wage distribution, showing that, since 1980, they have become increasingly overrepresented in the bottom. Downgrading of education and experience obtained abroad partially drives this pattern. I then undertake two empirical approaches to deepen our understanding of the way foreign-born workers shape the wage structure. First, I estimate a standard theoretical model featuring constant elasticity of substitution technology and skill types stratified across wage deciles. Second, I estimate reduced-form quantile treatment effects by constructing a ceteris paribus counterfactual wage distribution with lower immigration levels. Both analyses uncover a similar monotone pattern: a one percentage point increase in the share of foreign-born leads to a 0.2-0.3 (0.2-0.4) percent wage decrease (increase) in the bottom (top) decile and asserts no significant pressure in the middle. When analyzing the drivers of this pattern, I find suggestive evidence for a novel mechanism through which local labor markets absorb foreign-born workers: occupational differentiation of immigrants relative to natives.
Subjects: 
immigration
local labor markets
wage structure
counterfactual distribution
quantile treatment effects
JEL: 
C21
J15
J21
J31
R23
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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