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The Elasticity of Substitution between Native and Immigrant Labor: A Meta-Analysis

Author

Listed:
  • Klara Kantova

    (Institute of Economic Studies, Charles University, Prague)

  • Tomas Havranek

    (Institute of Economic Studies, Charles University, Prague, Centre for Economic Policy Research, London, Meta-Research Innovation Center, Stanford)

  • Zuzana Irsova

    (Institute of Economic Studies, Charles University, Prague, Anglo-American University, Prague)

Abstract

This paper presents the first comprehensive meta-analysis of the elasticity of substitution between native and immigrant labor. Drawing on 1,091 estimates from 41 studies, we examine whether immigrants and natives compete in the same labor markets, and to what extent published estimates are shaped by methodological choices and publication bias. We find strong evidence of small-study effects: less precise estimates are associated with lower elasticities, which is consistent with selective reporting. Correcting for these biases using a wide array of techniques (linear, nonlinear, and selection models) raises the mean implied elasticity from 13 to approximately 20. Model averaging techniques reveal that data features, such as experience level, wage definition, and region, explain much of the heterogeneity in reported results. Notably, the often-cited discrepancy between using log(mean wages) and mean(log wages) largely disappears once publication bias is accounted for. Our findings imply that immigrants and natives are imperfect substitutes but more substitutable than is commonly assumed.

Suggested Citation

  • Klara Kantova & Tomas Havranek & Zuzana Irsova, 2025. "The Elasticity of Substitution between Native and Immigrant Labor: A Meta-Analysis," Working Papers IES 2025/08, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2025.
    • Handle: RePEc:fau:wpaper:wp2025_08
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    More about this item

    Keywords

    elasticity of substitution; immigration; native labor; metaanalysis; publication bias;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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