Overview

Supply and demand principle applies to immigration to decide wage caseA fascinating and important example of supply and demand, full of complexities, is the role of immigration in determining wages. If you ask people, they are likely to tell you that immigration into California or Florida US, surely lowers the wages of people in those regions. It is just supply and demand analysis of immigration. According to this analysis, of these to these two regions in US. Immigration in to a region shifts the supply curve for labor to the right and pushes down wages. Why has it relationship between immigration to US these two regions immigrant number and wage? Careful economic studies cast doubt on this simple proposition, however, a recent survey of the evidence concludes: The effect of immigration on the labor market outcomes of natives is small in US. There is no evidence of economically significant reductions in native employment. Most analysis, finds that a 10 percent increase in the fraction of immigrants in the population reduced native wages by a most 1%.How can we explain the small impact of immigration on wages? The main mistake is to forget how mobile the American population is and that the impact of immigration on wages, we must examine the effect of new immigrants when the strength of the local economy and the number of native-born residents in a city are unchanged, that is, when these other things are held constant. Unless you exclude the effects other changing variables, you can not accurately predict the impact of immigration. The same principle holds in doing a supply0and demand analysis of any market. As much as possible, when you are examining the impact of a supply or demand shift, you must try to keep all other things constant.

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9781661972745

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