Is the Minimum Wage a Pull Factor for Immigrants?

25 Pages Posted: 3 Jan 2011

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.

Keywords: employment effects, expected wages, immigration, minimum wage, wage effects

JEL Classification: J08, J23, J38, J61

Suggested Citation

Giulietti, Corrado, Is the Minimum Wage a Pull Factor for Immigrants?. IZA Discussion Paper No. 5410. Available at SSRN: https://ssrn.com/abstract=1733735

Corrado Giulietti (Contact Author)

Department of Economics ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

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