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Go back to what's in the article: > To examine how this huge influx of workers affected the labour market in Miami, David Card compared the wage and employment
by Mikeb85 5y ago
Go back to what's in the article:
> To examine how this huge influx of workers affected the labour market in Miami, David Card compared the wage and employment trends in Miami with the evolution of wages and employment in four comparison cities.
> Despite the enormous increase in labour supply, Card found no negative effects for Miami residents with low levels of education. Wages did not fall and unemployment did not increase relative to the other cities. This study generated large amounts of new empirical work, and we now have a better understanding of the effects of immigration.
Look at the conclusion: "Card found NO negative effects for Miami residents with low levels of education." NO negative effects is quite the statement.
Now, the follow up studies:
> or example, follow-up studies have shown that increased immigration has a positive effect on income for many groups who were born in the country, while people who immigrated at an earlier time are negatively affected. One explanation for this is that the natives switch to jobs that require good native language skills, and where they do not have to compete with immigrants for jobs.
Now that's a negative effect. He made the assertion of NO negative effects.
In second year economics my prof would have failed me for such a basic conclusion. Look at influx of people, compare unemployment rates to other cities, make conclusion from that.
When immigration happens there's things happening on both sides of the supply/demand curve. Immigrants bring money, they also are labour. Different groups bring varying amounts of supply/demand. They compete for various jobs depending on their level of education (including language). There's also undocumented employment.
Anyhow, there's no mention of the wealth of the immigrants (often western nations are recipients of capital flight), no mention of aggregate demand, it says wages didn't fall but no mention of inflation and wage growth (ie. real wages), etc...
And if a study is so easily invalidated (sorry, elaborated upon), what's the point? Anyhow, it stuck out to me because it's an oft-cited study despite being incredibly basic and flawed (and many studies since more or less disproving it).
Anyhow, it's bad data (well, bad methodology from start to finish) because it draws a conclusion based on correlation between immigration and unemployment/wages without considering a ton of factors in between. It's like taking a chart of AAPL, GOOG, saying one depends on the other because they both go up during the same timeframe, ignoring everything else that's happening in the economy and tech industry.
Edit - it should also be mentioned, that literally the last ~5 or so years of politics in the west have centred around inequality, the plight of uneducated workers in the western world, globalism's effect of living conditions in the western world, etc... Populism on both the left and right is a thing because of it. It's pretty clear that a significant segment is being left behind. Wage stagnation IS a thing, and we know it because there's a lot of hindsight in the last 30 years. And Covid exacerbated inequality, with educated workers increasing their net worth drastically while lockdowns wreaked havoc on large segments of the economy. The cited study says absolutely nothing about the labour market, except that in one time and place, unemployment and wages didn't go down.
- huitzitziltzin 5y ago>> In second year economics my prof would have failed me for such a basic conclusion. This is a hilarious comment. You are saying that your economics professor would have failed you for making a claim akin to what one of these three Economics Nobel laureates claimed in a very well known, classic article in the labor literature? I'm an economics professor and I would be delighted to see work like this from an undergrad! >> Now that's a negative effect. He made the assertion of NO negative effects. What you and later studies have identified is that there may be heterogeneous causal effects across groups. There is a large literature on this topic! >> if a study is so easily invalidated... I'm not worried about this. You have not "invalidated" this study with five minutes of thinking! >>> it's bad data (well, bad methodology from start to finish) because it draws a conclusion based on correlation between immigration and unemployment/wages 1. It is not bad methodology. That is literally what half of the prize which went to Imbens and Angrist is about. This is a methodology which permits making causal claims in the absence of an experiment! 2. It is not drawing a conclusion based on a correlation. For more information about what they actually did and how it works (and this is a big interesting topic!) you might benefit from the Nobel Foundation's scientific background paper on this prize, here: https://www.nobelprize.org/uploads/2021/10/advanced-economicsciencesprize2021.pdf https://www.nobelprize.org/uploads/2021/10/advanced-economic...
- Mikeb85 5y agoSo an appeal to authority? The same organization that thought a US President that destabilized the middle east and assassinated people via drones deserved the Nobel Peace prize?
- shkkmo 5y agoAs far as I am aware, the Royal Swedish Academy of Sciences has no involvement in the selection of the recipient of the Nobel Peace prize.
- huitzitziltzin 5y agoI'm not sure what point you are trying to make, but you may be under some misapprehension about how the prizes are awarded. The Nobel Peace Prize is awarded by the Nobel Peace Prize Committee, which is appointed by the Norwegian Parliament. They decided Obama was worthy. The Nobel Prize in Economics (or, as everyone is fond of pointing out: "the Sveriges Riksbank Prize in Economic Science in Honor of Alfred Nobel") is awarded by the central bank of Sweden.