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Immigration's Effect on US Wages and Employment Redux

Author

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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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    File URL: https://cepr.org/publications/DP21756
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    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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