"Monopsony and the Wage Effects of Migration" - Michael Amior, Hebrew University of Jerusalem

Sep 13, 1:20 pm2:35 pm
Louis A. Simpson International Building, rm 271 and via Zoom
Event Description

Michael Amior is a Lecturer (Assistant Professor) in Economics at the Hebrew University of Jerusalem.

Michael Amior will be presenting via Zoom. Princeton individuals are invited to attend together in LAS Rm 271 (please note location update).



In a generalization of the well-known “immigration surplus” result, we show that immigration which preserves the skill mix of migrants must always increase the average native worker's marginal product, in any long-run constant returns economy. But in a monopsonistic labor market, immigration may also affect wages through the mark-downs imposed by firms. Using standard US census data, we reject the restrictions implied by the canonical competitive model. We attribute this rejection to an adverse mark-down effect, which quantitatively dominates the improvements in natives' marginal products. The capture of migrants' rents significantly expands the total surplus going to natives, but redistributes income among them (from workers to firms). Our estimates suggest that policies which constrain firms' market power over migrants can substantially benefit native labor.