Minimum wages, earnings, and migration

Abstract

Does increasing a state's minimum wage induce migration into the state? Previous literature has shown mobility in response to welfare benefit differentials across states, yet few have examined the minimum wage as a cause of mobility. Focusing on low-skilled immigrants, this paper empirically examines the effect of minimum wages on location decisions within the United States. This paper expands upon minimum wage and immigration literatures by demonstrating that the choice of destination is sensitive to minimum wage changes, and that the effects are highly dependent on the number of years an immigrant has resided in the U.S. JEL classification codes: J15, J61

Do minimum wages induce immigration?

“…This potential explanation is compatible with the findings of another study that also uses Current Population Survey panel data at the state level for 1994-2007 [11]. The analysis shows a positive effect of the minimum wage on the number of immigrants who have been in the US for less than four years but a negative effect on the number of immigrants who have been in the country for seven or more years (although the estimates are not statistically significant).…”

Minimum Wages and Healthy Diet

“…To continue the above example, this assumption would only be violated if policymakers were somehow able to increase the minimum wage and subsidize fruits and vegetables only for the treatment group (i.e., minimum income earners). One identification challenge that the DDD approach cannot solve is due to the fact that individuals may move to states with higher minimum wages (Boffy‐Ramirez ). Any migration effects are likely small, so we follow the literature on minimum wages and health and ignore this issue here.…”

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

“…However, Giulietti () found that federal minimum wage increases may serve as a pull for immigrants, particularly of Mexican origin. These findings, along with those of Cadena () and Boffy‐Ramirez (), suggest that immigrants’ location decisions are more responsive to labor‐market conditions than are those of natives (Borjas ; Cadena ; Cadena and Kovak ; Jaeger ).…”

“… Cadena () argued that negative employment effects in part explain why minimum wage increases result in reduced growth to a state's immigrant population. In contrast to this argument, Boffy‐Ramirez () found that low‐skilled immigrants are attracted to states with higher minimum wages, though this is dependent upon their length of residence in the United States. The results are positive and significant for immigrants who have resided in the United States for between 2 and 4 years. …”