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Substitution Between Immigrants, Natives, and Skill Groups

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Listed:
  • George J. Borjas
  • Jeffrey Grogger
  • Gordon H. Hanson

Abstract

The wage impact of immigration depends crucially on the elasticity of substitution between similarly skilled immigrants and natives and the elasticity of substitution between high school dropouts and graduates. This paper revisits the estimation of these elasticities. The U.S. data indicate that equally skilled immigrants and natives are perfect substitutes. The value of the second elasticity depends on how one controls for changes in demand that have differentially affected high school dropouts and graduates. The groups are imperfect substitutes under standard trend assumptions, but even slight deviations from these assumptions can lead to an outright rejection of the CES framework.

Suggested Citation

  • George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2011. "Substitution Between Immigrants, Natives, and Skill Groups," NBER Working Papers 17461, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17461 Note: ITI LS
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    Cited by:

    1. repec:pal:easeco:v:43:y:2017:i:3:d:10.1057_s41302-016-0011-z is not listed on IDEAS
    2. Carmen Camacho & Fabio Mariani & Luca Pensieroso, 2017. "Illegal immigration and the shadow economy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(6), pages 1050-1080, December.
    3. Ramstetter, Eric D., 2016. "Foreign Workers, Foreign Multinationals, and Wages by Occupation and Sex in Malaysia’s Manufacturing Plants during the mid-1990s," AGI Working Paper Series 2016-23, Asian Growth Research Institute.
    4. Emily Gu & Chad Sparber, 2017. "The Native-Born Occupational Skill Response to Immigration within Education and Experience Cells," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, pages 426-450.
    5. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    6. Peter McHenry, 2015. "Immigration and the Human Capital of Natives," Journal of Human Resources, University of Wisconsin Press, vol. 50(1), pages 34-71.
    7. Ramstetter, Eric D., 2017. "Foreign Workers, Foreign Multinationals, and Wages after Controlling for Occupation and Sex in Malaysia’s Manufacturing Plants during the mid-1990s," AGI Working Paper Series 2017-13, Asian Growth Research Institute.
    8. Stöhr, Tobias, 2015. "The returns to occupational foreign language use: Evidence from Germany," Labour Economics, Elsevier, vol. 32(C), pages 86-98.
    9. Giuntella, Osea & Mazzonna, Fabrizio, 2014. "Do Immigrants Bring Good Health?," IZA Discussion Papers 8073, Institute for the Study of Labor (IZA).
    10. Luca Marchiori & Patrice Pieretti & Benteng Zou, 2014. "Immigration, occupational choice and public employment," CREA Discussion Paper Series 14-15, Center for Research in Economic Analysis, University of Luxembourg.
    11. Blau, Francine D. & Kahn, Lawrence M., 2012. "Immigration and the Distribution of Incomes," IZA Discussion Papers 6921, Institute for the Study of Labor (IZA).
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    13. Eric D. , Ramstetter, 2016. "Experiences with Foreign Workers in Singapore and Malaysia: What are the Lessons for Japan's Labor Markets?," AGI Working Paper Series 2016-06, Asian Growth Research Institute.
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    More about this item

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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