The Effects of Minimum Wages on Low‐Skilled Immigrants’ Wages, Employment, and Poverty

40 Pages Posted: 22 Mar 2019

See all articles by Brandyn Churchill

Brandyn Churchill

Vanderbilt University

Joseph Sabia

San Diego State University - Department of Economics

Date Written: April 2019

Abstract

Raising the minimum wage has been advanced as complementary policy to comprehensive immigration reform to improve low‐skilled immigrants’ economic well‐being. While adverse labor demand effects could undermine this goal, existing studies do not detect evidence of negative employment effects. We re‐investigate this question using data from the 1994 to 2016 Current Population Survey and conclude that minimum wage increases reduced employment of less‐educated Hispanic immigrants, with estimated elasticities of around –0.1. However, we also find that the wage and employment effects of minimum wages on low‐skilled immigrants diminished over the last decade. This finding is consistent with more restrictive state immigration policies and the Great Recession inducing outmigration of low‐skilled immigrants, as well as immigrants moving into the informal sector. Finally, our results show that raising the minimum wage is an ineffective policy tool for reducing poverty among immigrants.

Suggested Citation

Churchill, Brandyn and Sabia, Joseph, The Effects of Minimum Wages on Low‐Skilled Immigrants’ Wages, Employment, and Poverty (April 2019). Industrial Relations: A Journal of Economy and Society, Vol. 58, Issue 2, pp. 275-314, 2019, Available at SSRN: https://ssrn.com/abstract=3357834 or http://dx.doi.org/10.1111/irel.12232

Brandyn Churchill (Contact Author)

Vanderbilt University ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States

Joseph Sabia

San Diego State University - Department of Economics ( email )

5500 Campanile Drive
San Diego, CA 92182
United States

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