The traditional Becker/Arrow style model of discrimination depicts majority and minority workers as perfectly substitutable inputs, implying that all workers have the same job assignment. The model is only appropriate for determining whether pay differences between, for example, whites and...

Why do immigration shocks tend to have benign effects on native wages? One reason is that immigrants as consumers contribute to the demand for their services. We model an economy where workers spend their wages on a locally produced good, then test it via a reexamination of the 1980 "Mariel...