Full Citation

Title: Rethinking the Area Approach: Immigrants and the Labor Market in California, 1960-2005

Citation Type: Working Paper

Publication Year: 2010

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Abstract: I show that a CES production-function-based approach with skill differentiation and integrated nationallabor markets has predictions for the employment effect of immigrants at the local level. The model predictsthat if I look at the employment (rather than wage) response by skill to immigration in a state, I canestimate the substitutability-complementarity between natives and immigrants. This allows me to infer,other things constant, how immigrants stimulate or depress the demand for native labor. I also use a novelinstrument based on demographic characteristics of total Central American migrants or of the MexicanPopulation to predict immigration by skill level within California. Looking at immigration to Californiabetween 1960 and 2005 my estimates support the assumption of a nationally integrated labor market by skilland they support the hypothesis that natives and immigrants in the same education-experience group arenot perfectly substitutable. This, in turn, explains the counter-intuitive fact that there is a zero correlationbetween immigration and wage and employment outcomes of natives.

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Authors: Peri, Giovanni

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Publication Number: 10-10

Institution: UC Davis

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Publisher Location: UC Davis

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Migration and Immigration

Countries: Mexico, United States