Local Labor Supply Responses to Immigration

29 Pages Posted: 26 Mar 2015

See all articles by Ximena V. Del Carpio

Ximena V. Del Carpio

World Bank - Independent Evaluation Group

Caglar Ozden

World Bank - Research Department

Mauro Testaverde

World Bank

Mathis C. Wagner

Boston College

Date Written: April 2015


How natives adjust is central to an understanding of the impact of immigration in destination countries. Using detailed labor force data for Malaysia for 1990–2010, we provide estimates of native responses to immigration on multiple extensive margins and rare evidence for a developing country. Instrumental variable estimates show that increased immigration to a state causes substantial internal inward migration, consistent with the fact that immigration increases the demand for native workers. Relocating Malaysian workers are accompanied by their spouses (three‐quarters of whom are housewives) and children who attend school. We find that these effects are concentrated among middle‐ and lower‐skilled Malaysians.

Keywords: Labor supply, migration, native adjustment

JEL Classification: F22, J61, R23

Suggested Citation

Del Carpio, Ximena V. and Özden, Çaglar and Testaverde, Mauro and Wagner, Mathis Christoph, Local Labor Supply Responses to Immigration (April 2015). The Scandinavian Journal of Economics, Vol. 117, Issue 2, pp. 493-521, 2015, Available at SSRN: https://ssrn.com/abstract=2584768 or http://dx.doi.org/10.1111/sjoe.12099

Ximena V. Del Carpio (Contact Author)

World Bank - Independent Evaluation Group ( email )

Washington, DC 20433
United States

Çaglar Özden

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/cozden

Mauro Testaverde

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Mathis Christoph Wagner

Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

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