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Local Labor Market Adjustment to Immigration: The Roles of Participation and the Short Run

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  • Hannes Johannsson
  • Stephan Weiler

Abstract

ABSTRACT While previous research has generally found that immigration raises unemployment for natives, effects are often more muted than expected. Anticipated out‐migration responses have been similarly difficult to discern. However, these findings may be byproducts of the long‐run nature of most inquiries, which furthermore do not account for changes in natives’ labor force participation. In response, this study evaluates the impact of the arrival of low‐skilled immigrants on low‐skilled natives in urban areas over a five year period. Initial static results from the Census Basic Monthly Survey clearly indicate that immigrants have a significant negative impact on natives’ labor force participation. Building upon these static panel results, characteristics of immigrants’ destination choices are examined along with the ensuing adjustment process through dynamic analyses of local markets. Surges of immigrants significantly reduce the labor force participation of low‐skilled natives, emphasizing this often neglected channel for labor market adjustment. Previous work may thus understate the true impact of immigrants on local labor markets by focusing on the longer term and ignoring adjustments through participation.

Suggested Citation

  • Hannes Johannsson & Stephan Weiler, 2004. "Local Labor Market Adjustment to Immigration: The Roles of Participation and the Short Run," Growth and Change, Wiley Blackwell, vol. 35(1), pages 61-76, February.
    • Handle: RePEc:bla:growch:v:35:y:2004:i:1:p:61-76
    DOI: 10.1111/j.0017-4815.2004.00238.x
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    References listed on IDEAS

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    1. Gordon H. Hanson & Matthew J. Slaughter, 1999. "The Rybczynski Theorem, Factor-Price Equalization, and Immigration: Evidence from U.S. States," NBER Working Papers 7074, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2009. "Regional Economic Impacts of Immigration: A Review," Tinbergen Institute Discussion Papers 09-047/3, Tinbergen Institute, revised 23 Jul 2009.
    2. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2010. "Meta-Analyses of Labour-Market Impacts of Immigration: Key Conclusions and Policy Implications," Environment and Planning C, , vol. 28(5), pages 819-833, October.
    3. Simonetta LONGHI & Peter NIJKAMP & Jacques POOT, 2008. "Meta-Analysis Of Empirical Evidence On The Labour Market Impacts Of Immigration," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 161-191.
    4. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2011. "The Economic Impact of Immigration on the Labor Market of Host Countries - Meta-Analytic Evidence," Tinbergen Institute Discussion Papers 11-103/3, Tinbergen Institute.

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