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The Effects of Immigration on California's Labor Market

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  • Giovanni Peri

    (Department of Economics, University of California Davis)

Abstract

As of 2004 California employed almost 30% of all foreign born workers in the U.S. and was the state with the largest percentage of immigrants in the labor force. It also received a very large number of Mexican and uneducated immigrants during the recent decades. If immigration harms the labor opportunities of natives, especially the least skilled ones, in the form of downward wage pressure, pressure to move out of the state or increased likelihood to loose their jobs, California was the place where these effects should have been stronger. By analyzing the behavior of population, employment and wages of U.S. natives in California in the period 1960-2004 we address this issue. We consider workers of different education and age as imperfectly substitutable in production and we exploit the differences in immigration across these groups to infer their impact on US natives. Our estimates use international migration to other U.S. states as instrument for international migration to California to isolate the ”supply-driven” variation of immigrants across skills and identify the labor market responses of natives. We find that in the considered period immigration did not produce significant migratory response or loss of jobs of natives. Moreover we find that immigrants were imperfect substitutes for natives of similar education and age, hence they stimulated, rather than harmed the demand and wages of U.S. native workers.

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Bibliographic Info

Paper provided by University of California, Davis, Department of Economics in its series Working Papers with number 637.

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Length: 32
Date of creation: 13 Sep 2006
Date of revision:
Handle: RePEc:cda:wpaper:06-37

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Related research

Keywords: Immigration; Skill Complementarities; Employment; Inter-state migration; wage effects.;

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References

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  1. Ethan Lewis, 2005. "Immigration, Skill Mix, and the Choice of Technique," Working Papers 05-04, Center for Economic Studies, U.S. Census Bureau.
  2. David Card, 1990. "The impact of the Mariel boatlift on the Miami labor market," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
  3. David Card & Ethan G. Lewis, 2007. "The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts," NBER Chapters, in: Mexican Immigration to the United States, pages 193-228 National Bureau of Economic Research, Inc.
  4. Gianmarco I.P. Ottaviano & Giovanni Peri, 2006. "Rethinking the Effects of Immigration on Wages," NBER Working Papers 12497, National Bureau of Economic Research, Inc.
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