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Do Surges in Less-Skilled Immigration Have Important Wage Effects? A Review of the U.S. Evidence

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Author Info
David R. Howell

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Abstract

This paper reviews a small part of a vast professional literature on the labor market effects of new immigrants. It focuses on recent studies that have employed econometric techniques to estimate wage effects of less-skilled immigrants during the two great American immigration surges (roughly 1870-1914 and 1980 to the present).  

The literature is fairly consistent in finding that large long-term immigrant surges have at least small negative wage effects for less-advantaged members of the labor force, and that these are likely to be largest for foreign-born workers and less-educated African-Americans in major immigrant-receiving regions. While this is consistent with the simple textbook prediction in a largely deregulated labor market, we might have expected more robust negative effects. The explanation may be that these effects are inherently difficult to isolate, especially given the quality of the data. Many less-skilled new immigrants are undocumented workers who are employed by individuals or small family businesses under-the-table and are either not counted or counted poorly.  

The paper concludes that, while all consumers and many employers (both as households and as firms) have undoubtedly benefited substantially from the surge in undocumented low-skilled workers since the early 1980s, there are also some losers, and there is consequently a need for policy interventions designed to ensure that socially-acceptable wage levels, employment opportunities, and working conditions are maintained for our least advantaged workers, native- and foreign-born alike.  

David Howell is a professor at Milano The New School for Management & Urban Policy. He is the editor of Fighting Unemployment: The Limits of Free Market Orthodoxy.

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Paper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp128.

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Date of creation: 2007
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Handle: RePEc:uma:periwp:wp128

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Related research
Keywords: immigration wages labor markets labor supply

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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  1. David Card & John DiNardo, 2000. "Do Immigrant Inflows Lead to Native Outflows?," American Economic Review, American Economic Association, vol. 90(2), pages 360-367, May. [Downloadable!] (restricted)
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  2. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2006. "The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain," IZA Discussion Papers 2352, Institute for the Study of Labor (IZA). [Downloadable!]
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  3. Gianmarco I.P. Ottaviano & Giovanni Peri, 2006. "Rethinking the Effects of Immigration on Wages," NBER Working Papers 12497, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Hatton, Timothy J. & Williamson, Jeffrey G, 2006. "What Determines Immigrations' Impact? Comparing Two Global Centuries," CEPR Discussion Papers 5885, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January. [Downloadable!] (restricted)
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  6. David Card, 1990. "The impact of the Mariel boatlift on the Miami labor market," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 43(2), pages 245-257, January.
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