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Local Labor Supply Responses to Immigration
Authors:Ximena Del Carpio  Çağlar Özden  Mauro Testaverde  Mathis Wagner
Affiliation:1. World Bank, Washington, DC, USA;2. Boston College, Chestnut Hill, MA, USA
Abstract:How natives adjust is central to an understanding of the impact of immigration in destination countries. Using detailed labor force data for Malaysia for 1990–2010, we provide estimates of native responses to immigration on multiple extensive margins and rare evidence for a developing country. Instrumental variable estimates show that increased immigration to a state causes substantial internal inward migration, consistent with the fact that immigration increases the demand for native workers. Relocating Malaysian workers are accompanied by their spouses (three‐quarters of whom are housewives) and children who attend school. We find that these effects are concentrated among middle‐ and lower‐skilled Malaysians.
Keywords:Labor supply  migration  native adjustment  F22  J61  R23
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