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Estimating the effects of immigration in one city


This paper presents a new method of estimating the effects of immigration on the labor market that does not require variations in immigration across cities. With a two-stage CES model that aggregates immigrant groups by age cohorts and aggregates cohorts into effective labor, the econometric estimation and the interpretation of parameters are particularly straightforward. The paper uses data from Hong Kong to estimate the elasticities of complementarity associated with increased immigration. A simulation study indicates that a 40% increase in the stock of new immigrants will lower wages by no more than one percent.

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Received: 13 August 1997/Accepted: 7 December 1998

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Suen, W. Estimating the effects of immigration in one city. J Popul Econ 13, 99–112 (2000).

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  • JEL classification: J23, J31, J61
  • Key words: Immigrant-cohort size, two-stage CES model, elasticity of complementarity