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Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis

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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Submitted on : Friday, March 6, 2015 - 11:30:13 PM
Last modification on : Monday, March 21, 2022 - 2:47:48 PM
Long-term archiving on: : Sunday, June 7, 2015 - 9:01:15 PM

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

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