THE IMPACT OF IMMIGRATION ON WAGE DYNAMICS: EVIDENCE FROM THE ALGERIAN INDEPENDENCE WAR

This paper investigates the dynamics of wage adjustment to an exogenous increase in labor supply exploiting the sudden and unexpected inflow of repatriates to France resulting from Algerian independence in 1962. I measure the impact of this particular supply shift on the average wage of pre-existing native workers across French regions between 1962 and 1976. I find that regional wages decreased between 1962 and 1968, before returning to their pre-shock level 15 years after. I also investigate the dynamics of skill-specific wages in response to the regional penetration of repatriates and find that the wages of high and low educated native workers declined initially but fully recovered by 1976.