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The Association between Immigration and Labor Market Outcomes in the United States

Author

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  • Basso, Gaetano

    () (University of California, Davis)

  • Peri, Giovanni

    () (University of California, Davis)

Abstract

In this paper we present important correlations between immigration and labor market outcomes of native workers in the US. We use data on local labor markets, states and regions from the Census and American Community Survey over the period 1970-2010. We first look at simple correlations and then we use regression analysis with an increasing number of controls for observed and unobserved factors. We review the potential methods to separate the part of this correlation that captures the causal link from immigrants to native labor outcomes and we show estimates obtained with 2SLS method using the popular shift-share instrument. One fact emerging from all the specifications is that the net growth of immigrant labor has a zero to positive correlation with changes in native wages and native employment, in aggregate and by skill group. We briefly review the literature on the channels and the mechanisms that allow local economies to absorb immigrants with no negative (and possibly positive) impact on the labor demand for natives.

Suggested Citation

  • Basso, Gaetano & Peri, Giovanni, 2015. "The Association between Immigration and Labor Market Outcomes in the United States," IZA Discussion Papers 9436, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp9436
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    File URL: http://ftp.iza.org/dp9436.pdf
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    References listed on IDEAS

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    1. Francesco D'Amuri & Giovanni Peri, 2016. "Immigration, Jobs, And Employment Protection: Evidence From Europe Before And During The Great Recession," World Scientific Book Chapters,in: The Economics of International Migration, chapter 5, pages 153-185 World Scientific Publishing Co. Pte. Ltd..
    2. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    3. Andreas Beerli & Giovanni Peri, 2015. "The Labor Market Effects of Opening the Border: New Evidence from Switzerland," NBER Working Papers 21319, National Bureau of Economic Research, Inc.
    4. 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.
    5. Rachel M. Friedberg, 2001. "The Impact of Mass Migration on the Israeli Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1373-1408.
    6. George J. Borjas & Kirk B. Doran, 2015. "Cognitive Mobility: Labor Market Responses to Supply Shocks in the Space of Ideas," Journal of Labor Economics, University of Chicago Press, vol. 33(S1), pages 109-145.
    7. George J. Borjas & Kirk B. Doran, 2012. "The Collapse of the Soviet Union and the Productivity of American Mathematicians," The Quarterly Journal of Economics, Oxford University Press, vol. 127(3), pages 1143-1203.
    8. Giovanni Peri & Kevin Shih & Chad Sparber, 2016. "STEM Workers, H-1B Visas, and Productivity in US Cities," World Scientific Book Chapters,in: The Economics of International Migration, chapter 9, pages 277-307 World Scientific Publishing Co. Pte. Ltd..
    9. William R. Kerr & William F. Lincoln, 2010. "The Supply Side of Innovation: H-1B Visa Reforms and U.S. Ethnic Invention," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 473-508, July.
    10. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
    11. Frédéric Docquier & Giovanni Peri & Ilse Ruyssen, 2016. "The Cross-country Determinants of Potential and Actual Migration," World Scientific Book Chapters,in: The Economics of International Migration, chapter 12, pages 361-423 World Scientific Publishing Co. Pte. Ltd..
    12. Rachel M. Friedberg & Jennifer Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 23-44, Spring.
    13. repec:wsi:wschap:9789814719902_0010 is not listed on IDEAS
    14. Francesc Ortega & Giovanni Peri, 2016. "Openness and income: The roles of trade and migration," World Scientific Book Chapters,in: The Economics of International Migration, chapter 10, pages 309-329 World Scientific Publishing Co. Pte. Ltd..
    15. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
    16. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
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    1. Is globalization to blame?
      by chris in Stumbling and Mumbling on 2016-11-11 19:43:16

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    Cited by:

    1. Hausmann, Ricardo & Obach, Juan & Santos, Miquel Angel, 2016. "Special Economic Zones in Panama: A Critical Assessment," Working Paper Series rwp16-044, Harvard University, John F. Kennedy School of Government.
    2. Ricardo Hausmann & Juan Obach & Miguel Angel Santos, 2016. "Special Economic Zones in Panama: Technology Spillovers from a Labor Market Perspective," CID Working Papers 326, Center for International Development at Harvard University.
    3. Jongkwan Lee & Giovanni Peri & Vasil Yasenov, 2017. "The Employment Effects of Mexican Repatriations: Evidence from the 1930's," NBER Working Papers 23885, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    immigration; employment; wages; labor markets;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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