Recent Immigrants as Labor Market Arbitrageurs: Evidence from the Minimum Wage

55 Pages Posted: 1 Jun 2010 Last revised: 1 Aug 2013

See all articles by Brian C. Cadena

Brian C. Cadena

University of Colorado at Boulder - Department of Economics

Date Written: July 31, 2013

Abstract

This paper investigates the local labor supply effects of changes to the minimum wage by examining the response of low-skilled immigrants' location decisions. Canonical models emphasize the importance of labor mobility when evaluating the employment effects of the minimum wage; yet few studies address this outcome directly. Low-skilled immigrant populations shift toward labor markets with stagnant minimum wages, and this result is robust to a number of alternative interpretations. This mobility provides behavior-based evidence in favor of a non-trivial disemployment effect of the minimum wage. Further, it reduces the estimated demand elasticity using teens; employment losses among native teens are substantially larger in states that have historically attracted few immigrant residents.

Keywords: minimum wage, immigration, labor mobility, spatial equilibrium

JEL Classification: J23, J61, J38

Suggested Citation

Cadena, Brian C., Recent Immigrants as Labor Market Arbitrageurs: Evidence from the Minimum Wage (July 31, 2013). Available at SSRN: https://ssrn.com/abstract=1619084 or http://dx.doi.org/10.2139/ssrn.1619084

Brian C. Cadena (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States
3034927908 (Phone)

HOME PAGE: http://spot.colorado.edu/~cadenab/Home.html

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