Feb 25, 2012


On country borders (from this NYT article by Paul Theroux):
I TREASURE border crossings, and the best of them are the ones where I’ve had to walk from one country to another, savoring the equality of being a pedestrian, stepping over the theoretical line that is shown on maps, from Cambodia into Vietnam, from Pakistan into India, from Turkey into the Republic of Georgia. Usually a frontier is a river — the Mekong, the Rio Grande, the Zambezi; or a mountain range — the Pyrenees, the Rwenzoris. It can also be a sudden alteration in topography, a bewildering landscape transformation — hilly Vermont flattening into Quebec. But just as often a border is a political expedient — irrational yet unremarkable — creating a seamless no man’s land, just a width of earth, bounded by fences.
. . . [I]n the UK natives and foreign born workers are imperfect substitutes. We show that immigration has primarily reduced the wages of immigrants—and in particular of university educated immigrants—with little discernable effect on the wages of the native-born.
The effect of immigrants on wages [from this recent article by Ottaviano and Peri, also in the JEEA]:
New to this paper is the estimate of the substitutability between natives and immigrants of similar education and experience levels. In the data-preferred model, there is a small but significant degree of imperfect substitutability between natives and immigrants which, when combined with the other estimated elasticities, implies that in the period from 1990 to 2006 immigration had a small effect on the wages of native workers with no high school degree (between 0.6% and +1.7%). It also had a small positive effect on average native wages (+0.6%) and a substantial negative effect (−6.7%) on wages of previous immigrants in the long run.

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