The Effects of Immigration on California's Labor Market
AbstractAs 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 InfoPaper provided by University of California, Davis, Department of Economics in its series Working Papers with number 637.
Date of creation: 13 Sep 2006
Date of revision:
Immigration; Skill Complementarities; Employment; Inter-state migration; wage effects.;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
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