South-South migration and the labor market: Evidence from South Africa

Using census data for 1996, 2001 and 2007 we study the labor market effect of immigration to South Africa. The paper contributes to a small but growing literature on the impact of South-South migration by looking at one of the most attractive destinations for migrant workers in Sub-Saharan Africa. We exploit the variation - both at the district level and at the national one - in the share of foreign-born male workers across schooling and experience groups over time. At the district level, we estimate that increased immigration has a negative and significant effect on natives' employment rates - and that this effect is more negative for skilled and white South African native workers - but not on total income. These results are robust to using an instrumental variable estimation strategy. At the national level, we find that increased immigration has a negative and significant effect on natives total income but not on employment rates. Our results are consistent with outflows of natives to other districts as a consequence of migration, as in Borjas (2006).