This paper investigates the local labor supply effects of changes to the minimum wage by examining
the response of low-skilled immigrants’ location decisions. Canonical models emphasize the importance of labor mobility when evaluating the employment effects of the minimum wage; yet few studies
address this outcome directly. Low-skilled immigrant populations shift toward labor markets with
stagnant minimum wages, and this result is robust to a number of alternative interpretations. This
mobility provides behavior-based evidence in favor of a non-trivial negative employment effect of
the minimum wage. Further, it reduces the estimated demand elasticity using teens; employment
losses among native teens are substantially larger in states that have historically attracted few immigrant residents.
We find that a Government legislated minimum wage is lower than a wage floor set within collective agreements. This effect survives to several robustness checks and can be interpreted as a causal effect of the setting
regime on the level of the minimum wage