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The effect of minimum wages on immigrants' employment and earnings

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Abstract

This study examines how minimum wage laws affect the employment and earnings of low-skilled immigrants and natives in the U.S. Minimum wage increases might have larger effects among low-skilled immigrants than among natives because, on average, immigrants earn less than natives due to lower levels of education, limited English skills, and less social capital. Results based on data from the Current Population Survey for the years 1994?2005 do not indicate that minimum wages have adverse employment effects among adult immigrants or natives who did not complete high school. However, low-skilled immigrants may have been discouraged from settling in states that set wage floors substantially above the federal minimum.

Suggested Citation

  • Pia M. Orrenius & Madeline Zavodny, 2008. "The effect of minimum wages on immigrants' employment and earnings," Working Papers 0805, Federal Reserve Bank of Dallas.
    • Handle: RePEc:fip:feddwp:0805
    Note: Published as: Orrenius, Pia M. and Madeline Zavodny (2008), "The Effect of Minimum Wages on Immigrants' Employment and Earnings," Industrial and Labor Relations Review 61 (4): 544-563.
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    More about this item

    Keywords

    Immigrants; Minimum wage; Human capital; Education; Wages; Employment;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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