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Title: Refining the Estimation of Immigration's Labor Market Effects
Citation Type: Working Paper
Publication Year: 2005
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Abstract: Reviewing a large set of papers that analyzed the effect of immigration on the wages of native-born workers in the U.S., the National Academy of Science Panel on Immigration (1997) concluded there is only a small adverse impact of immigration on the wage and employment opportunities of competing native groups. Borjas (2003) suggests that since migration within the U.S. arbitrages local wage differentials, the effects estimated in many previous studies are understated. He uses variation across skill groups over time in the national labor market and finds large negative impacts of immigration on the wages of native-born workers. We find that Borjas results are driven largely by the earnings of one skill group during a 20 year period high school dropouts between 1980 and 2000. Any factor correlated with decreasing earnings of high school dropouts during these years including de-industrialization, skill-biased technological change, or increasing negative selectivity of dropouts, equally explains his results. Indeed, trends shows that the wages of high school dropouts were falling considerably preceding the rise in the fraction of the low-skilled workforce that were immigrants. Because many factors affected wages of the low-skilled in the U.S. over this time period we explore one country where immigrant shocks were among higher skilled groups. Canada stands as an ideal comparison to separate the effects of immigration on wages from other reasons related to the decline in wages of low-skilled workers as immigration to Canada was considerably more skilled than immigration to the U.S. The Canadian experience suggests that the measured effect of immigration on the wages of the native-born Canadians is negative, extremely small and statistically indistinguishable from zero.
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Authors: Sanders, Seth; Bohn, Sarah
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Institution: University of Maryland at College Park
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Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Migration and Immigration
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