Is the Minimum Wage a Pull Factor for Immigrants?
In this article, the author studies the effects of the minimum wage on immigration. He develops an analytical framework in which immigration is a function of the expected wage in the region of destination. In the analysis, the author exploits the state variation in expected wages stemming from the changes in the U.S. federal minimum wage during 1996–1997 and 2007–2009. The author addresses endogeneity between immigration and the expected wage using an instrumental variable approach. His results provide consistent evidence that the policy induced a sizeable flow of low-skilled immigrants to the United States in both periods. This pull is attributable to the minimum wage increasing immigrants’ wages without harming their potential employment outcomes. The author corroborates these findings by showing that the policy did not have any impact on the flow of high-skilled immigrants. The effect on low-skilled immigration is also found when the interstate mobility of immigrants is considered. Finally, changes in the minimum wage only attracted legal immigrants, while undocumented immigrants were not affected.
As of August 31, 2014, the ILR Review is published by SAGE. Please visit the journal site to read this article.