Africa, Human Migrations & Resettlements, immigration, impact, marginal product, rapoport, remittance, Social development, social services, United States, wage, Remittances, East Asia and Pacific, Europe and Central Asia, South Asia
Remittances and the Wage Impact of Immigration

This paper examines the impact of remittances on the wages of native workers in the sending country. The model shows that the wage impact of immigration depends on the competing effects of an increase in labor market competition and an increase in the consumer base. Immigrant remittances provide a unique way of isolating this latter effect since they reduce the consumer base but not the workforce. The predictions of the model are tested using an unusually rich German data set that has detailed information on remittances and wages. As expected, the results indicate that a ten percent increase in remittances depress the wages of native workers by 1.6%. Furthermore, remittances predominantly affect workers in non traded industries that are more reliant on domestic consumption.

Added by View user profileD C on March 4, 2013