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The impact of immigration on the labour market: Evidence from 20 years of cross-border migration to Argentina

Battiston, Diego (2013): The impact of immigration on the labour market: Evidence from 20 years of cross-border migration to Argentina.

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Abstract

This paper studies the effects of immigration on the wages of Argentinean native workers over the period 1993-2012. I use a novel micro-dataset which combines household surveys from Argentina and six other Latin American countries. Immigration from these six countries accounts for 95% of the total immigration from Latin American countries. The empirical strategy identifies the effects of the labour supply variation using the “national approach” from Borjas (2003) and a reduced form equation obtained within a CES framework. In order to account for demand/pull shocks, I propose a set of instruments based on labour market conditions in immigrants’ home countries. An alternative specification also explores the hypothesis of heterogeneous impact by country of origin. Overall, findings show a significant negative impact of immigration on wages. IV estimates suggest that OLS results are a lower bound for the (partial) causal effect. Thus, if confounding demand factors exist, they bias the results toward zero.

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