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Percent

In August, 2010, CBS News and Vanity Fair commissioned a national poll that asked 1082 people, “ “Do you think illegal immigrants coming into this country take jobs away from American citizens, or do they mostly take jobs Americans don't want ?” .

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  1. In August, 2010, CBS News and Vanity Fair commissioned a national poll that asked 1082 people, ““Do you think illegal immigrants coming into this country take jobs away from American citizens, or do they mostly take jobs Americans don't want?” Nearly 90 percent of the respondents chose one of the two options offered but 34 people said they had no opinion on the subject and 105 volunteered that it was a bit of both. Suppose we drop the latter two groups and specify: Figure 1. Attitudes about whether Immigrants take Jobs away from natives by education Percent

  2. “Conventional Model”

  3. The United States has a guest worker (GW) program that allows American employers to hire temporary foreign laborers to fill low-skilled jobs such as lawn care (LC) workers. To hire one of these workers, an employer must apply for a H-2B visa, presenting evidence that the company could not find native workers willing to fill the jobs Source: Seminara, David. (2010) “Dirty Work: In-Sourcing American Jobs with H-2B Guestworkers,” Center for Immigration Studies.

  4. The Labor Department expects to issue thousands of H-2B visas this year, many of which will be used to hire temporary lawn care workers. Suppose the market for lawn care workers is composed only of natives and guest workers—i.e., ignore the presence of illegal immigrants. Assume that it is costless for employers to apply for H2-B visas and that foreign workers bear the cost of traveling to the United States. Suppose the demand for lawn care workers is: where w is the hourly wage and L is measured in thousands of lawn-care workers per year. Suppose the supply of native workers (N) and the supply of guest workers (G) in the market for lawn care workers are: What was the equilibrium wage and number of lawn workers? What would have the wage had been had their been no H-2B program? What is the implied displacement rate?

  5. Supply of Lawn-Care Workers Supply of Native Lawn-Care Workers Supply of Guest Lawn-Care Workers Wage ($ per hour) Lawn Care Workers (thousands per year)

  6. Market for Lawn-Care Workers Wage ($ per hour) Lawn Care Workers (thousands per year)

  7. The Immigration EquationBy Roger Lowenstein. The New York Times Magazine, July 9, 2006 The question of whether “more job seekers from abroad mean fewer opportunities, or lower wages, for native workers -- is one of the most controversial ideas in labor economics.”

  8. =round(#,0)

  9. Figure 1. California Manicurists, 1987-2002

  10. Do Vietnamese manicurists displace native manicurists? Empirical Specification Viet Manicurists (#) Time Trend…T=0,…,15 Non-Viet Manicurists (#) CA Manicurists, 2002 Los Angeles Non-Viet Manicurists (#) Viet Manicurists (#)

  11. Do Vietnamese manicurists displace native manicurists? Empirical Specification Viet Manicurists (# per thousand residents) Time Trend…T=0,…,15 Non-Viet Manicurists (# per 1000 residents)

  12. Table 1. Explaining the Number of Non-Vietnamese Manicurists using WLS

  13. Unobserved demand shocks that vary across cities, e.g., increased demand by “tweens” and their parents in Contra Costa, according to a couple of newspaper articles. True Model where Assume Empirical Specification

  14. Vietnamese manicurists are drawn to cities with positive demand shocks and away from those with negative shocks. Increases in demand increase the number of native manicurists. Displacement effect Upward bias: the expected value of the estimated displacement effect is less negative than the true displacement effect.

  15. Instrumental Variable (IV) Estimation instrumental variable Instrument relevance: Instrument exogeneity: z = historical size of Vietnamese enclave (VietEnclave)

  16. endogenous component, being part of the market for manicurists. exogenous component, being determined outside of the market for manicurists Cov(VE, Cov(VE, Hence, the instrument, , is likely to be relevant. Instrument purges of the component attributable to the demand shock due to some cities growing faster than others. Instrument exogeneity: The historical size of Vietnamese Enclaves (VE) is likely to be a validinstrument.

  17. Table 1. Explaining the Number of Non-Vietnamese Manicurists using WLS

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