Immigration and prices: quasi-experimental evidence from Syrian refugees in Turkey

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Balkan B., Tümen S.

JOURNAL OF POPULATION ECONOMICS, cilt.29, sa.3, ss.657-686, 2016 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 29 Sayı: 3
  • Basım Tarihi: 2016
  • Doi Numarası: 10.1007/s00148-016-0583-2
  • Dergi Adı: JOURNAL OF POPULATION ECONOMICS
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.657-686
  • Anahtar Kelimeler: Immigration, Consumer prices, Syrian refugees, Natural experiment, Informal employment, MARKET OUTCOMES EVIDENCE, SELF-SELECTION, IMPACT, MIGRATION
  • TED Üniversitesi Adresli: Hayır

Özet

We exploit the regional variation in the unexpected (or forced) inflow of Syrian refugees as a natural experiment to estimate the impact of immigration on consumer prices in Turkey. Using a difference-in-differences strategy and a comprehensive data set on the regional prices of CPI items, we find that general level of consumer prices has declined by approximately 2.5 % due to immigration. Prices of goods and services have declined in similar magnitudes. We highlight that the channel through which the price declines take place is the informal labor market. Syrian refugees supply inexpensive informal labor and, thus, substitute the informal native workers especially in informal-labor intensive sectors. We document that prices in these sectors have fallen by around 4 %, while the prices in the formal labor-intensive sectors have almost remained unchanged. Increase in the supply of informal immigrant workers generates labor cost advantages and keeps prices lower in the informal labor-intensive sectors.