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The Effects of Migration on Wages: Empirical Evidence from the Iranian Labor Market

Karami, Hassan | 2024

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 58333 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Keshavarz Haddad, Gholamreza
  7. Abstract:
  8. In August 2021, following the withdrawal of U.S. forces from Afghanistan, the Taliban group regained power after two decades. This geopolitical shift triggered substantial migration from Afghanistan to various countries, including Iran. This study investigates the impact of this event on the Iranian labor market, with a particular focus on the wages of Iranian men. Iran, which has long hosted a significant portion of Afghan migrants akin to Pakistan, emerged as a primary destination due to its geographical proximity, linguistic and cultural affinities, the presence of familial networks among these nationals, and relatively favorable labor market opportunities compared to other neighboring countries. The analysis seeks to estimate the causal effects of this influx on the Iranian labor market and, specifically, on the wages of native workers. Leveraging a nationwide prohibition imposed by Iran's Ministry of Interior on Afghan settlement in select provinces, this study exploits spatial variation in migrant inflows—evidenced by the virtual absence of these nationals in many prohibited provinces—and employs a difference-in-differences framework to quantify the effects on wages across heterogeneous subgroups of native Iranian workers. The results indicate an average wage reduction of 4 to 5 percent for native workers in occupations disproportionately occupied by Afghan migrants, with this depressive effect being more pronounced in less economically developed provinces
  9. Keywords:
  10. Migration ; Difference-in-Difference Method ; Prohibited Settlement Areas ; Afghan Nationals ; Iranian Labor Market ; Immigrant Effects on Wages of Native Workers

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