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Immigration's Effect on US Wages and Employment Redux

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  • Caiumi, Alessandro
  • Peri, Giovanni

Abstract

This article revives and enhances the factor-supply approach to estimate the effects of changes in immigrant supply on wages and employment of US natives. We introduce and validate a skill-based shift-share IV for immigrants’ labor supply. We find a positive impact of immigration on natives' employment and significant imperfect substitutability between natives and immigrants. Consistent with these estimates, we find significant task complementarity and occupational upgrading of native workers in response to immigrants. Finally, we calculate that immigration over 2000-2023 increased wages of non-college-educated natives by 2.6 to 3.4%, with small effects on other groups.

Suggested Citation

  • Caiumi, Alessandro & Peri, Giovanni, 2026. "Immigration's Effect on US Wages and Employment Redux," CEPR Discussion Papers 21756, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21756
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    2. Daniel J. Wilson & Xiaoqing Zhou, 2026. "The Impacts of Unauthorized Immigration on U.S. Labor and Housing Markets: New Evidence from Administrative Microdata," Working Paper Series 2026-23, Federal Reserve Bank of San Francisco.
    3. Tang, Wei & Wang, Lili, 2025. "Quantifying the distributional effects of urbanization and migration in China," China Economic Review, Elsevier, vol. 94(PA).
    4. Chopra, Anand & Mukherji, Ronit, 2026. "Automation and local labour markets: Impact of immigrant mobility," Labour Economics, Elsevier, vol. 100(C).
    5. Salathé, Chloé & Malancu, Natalia C. & Ruedin, Didier, 2025. "The Impact of Refugee Shocks on Host Countries: A Scoping Review," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 50, pages 301-322.
    6. Braga, Breno & Khanna, Gaurav & Turner, Sarah, 2024. "Migration policy and the supply of foreign physicians: Evidence from the Conrad 30 waiver program," Journal of Economic Behavior & Organization, Elsevier, vol. 226(C).
    7. Kim, Hyejin & Lee, Jongkwan & Peri, Giovanni, 2025. "The effect of low-skilled immigration on local productivity and amenities: Learning from the South Korean experience," Journal of Urban Economics, Elsevier, vol. 146(C).
    8. Kauhanen, Antti & Ropponen, Olli, 2025. "​​Preferential Tax Schemes and High-Skilled Immigration: Lessons for Finland," ETLA Brief 168, The Research Institute of the Finnish Economy.
    9. Joshua K. Bedi & Shaomeng Jia & Claudia Williamson Kramer, 2025. "Protecting Postville? The impact of deportation and immigration on crime," Public Choice, Springer, vol. 203(3), pages 369-396, June.
    10. Jin-Ngo, Dylan, 2026. "An extension of the insider-outsider labor market theory: The inclusion of quasi-insiders," Economics Letters, Elsevier, vol. 260(C).

    More about this item

    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J69 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Other

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