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Title: Immigration and the Human Capital of Natives

Citation Type: Working Paper

Publication Year: 2012

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Abstract: The economics literature has not reached consensus about how much (or even whether) immigration reduces wages among native-born workers. Area-based studies tend to find small if any effects. On the other hand, direct estimates of the elasticity of substitution between immigrant and native-born workers tend to be large, which implies large wage effects. In this paper, I show that elasticity of substitution estimates are upward-biased if native-born workers augment their human capital in the face of rising immigration. I then use the National Education Longitudinal Study (NELS:88) and U.S. Census data to show that low-skilled immigration induces natives to attain more years of schooling, improve their performance in school, and take jobs that involve communication-intensive tasks for which they (native English speakers) have a comparative advantage. My empirical findings imply that previous estimates of the elasticity of substitution are probably too high, which helps reconcile competing perspectives about immigrations effects on native-born workers wages.

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Authors: McHenry, Peter

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Institution: Department of Economics

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Publisher Location: Williamsburg, VA

Data Collections: IPUMS USA

Topics: Education, Labor Force and Occupational Structure, Migration and Immigration

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