Immigration and the Labor Market

These flashcards cover key vocabulary and concepts related to immigration and its impacts on local labor markets, wage dynamics, and economic theories.

Labor Demand (MRPL)

The relationship showing how labor demand decreases as wage increases.

Short Run vs Long Run

In the short run, capital is fixed and demand doesn't fully adjust; in the long run, firms can invest/expand leading to increased labor demand.

Elasticity of Labor Demand

The responsiveness of labor demand to changes in wages; low elasticity means wage drops are smaller, while high elasticity means larger wage drops.

Substitutes vs Complements

If natives and immigrants are substitutes, wage pressure on natives occurs; if they are complements, native wages can rise.

Capital Adjustment

When firms invest in response to increased labor supply, shifting labor demand outward.

Endogeneity

The issue of causal relationships being obscured due to bidirectional influences or omitted variable biases.

OVB (Omitted Variable Bias)

When a third variable influences both independent and dependent variables, leading to misleading conclusions.

Reverse Causality

A situation where causality is ambiguous because both variables influence each other.

Mariel Boatlift

A significant influx of Cuban immigrants to Miami in 1980 that served as a natural experiment for studying labor market impacts.

Nested CES Form

A production function structure that allows for varying degrees of substitutability between different types of labor.

Task Specialization

The phenomenon where different types of workers focus on different tasks to maximize productivity and wage returns.

CPS Microdata

Current Population Survey data used to analyze labor market outcomes, especially in relation to immigration effects.

Wage Pressure

The downward pressure on wages resulting from increased labor supply, especially when labor is considered a close substitute.

Communication vs Manual Tasks

The distinction between tasks that require language and communication skills versus those that require physical labor.

Task Allocation

The distribution of specific tasks among workers, which can be influenced by shifts in labor supply due to immigration.

Firm Entry and Scale

The phenomenon where more businesses enter due to increased labor supply, thereby increasing overall demand.