Economics Department


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Published in Labour Economics 15:4 (August 2008), pp. 560–574; doi 10.1016/j.labeco.2008.04.003 Copyright © 2008 Elsevier B.V. Used by permission. Published online May 2, 2008.


Why do immigration shocks tend to have benign effects on native wages? One reason is that immigrants as consumers contribute to the demand for their services. We model an economy where workers spend their wages on a locally produced good, then test it via a reexamination of the 1980 “Mariel Boatlift” using Wacziarg’s Channel Transmission methodology. Current Population Survey data on workers in 9 different retail labor markets and Survey of Buying Power data on retail spending by consumers in Miami and four comparison cities are used. We find strong evidence that the Mariel Boatlift augmented labor demand.

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