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Searching for the Effect of Immigration on the Labor Market

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  • George J. Borjas
  • Richard B. Freeman
  • Lawrence F. Katz

Abstract

We compare two approaches to analyzing the effects of immigration on the labor market and find that the estimated effect of immigration on U.S. native labor outcomes depends critically on the empirical experiment used. Area analyses contrast the level or change in immigration by area with the level or change in the outcomes of non- immigrant workers. Factor proportions analyses treat immigrants as a source of increased national supply of workers of the relevant skill. Cross-section comparisons of wages and immigration in the 1980 and 1990 Censuses yield unstable results casting doubt on the validity of these calculations. Analyses of changes over time for various education groups within regions give negative estimated immigration effects, which increase in magnitude the wider the area covered. Factor proportions calculations show that immigration was somewhat important in reducing the relative pay of U.S. high school dropouts during the 1980s, while immigration and trade contributed much more modestly to the falling pay of high school equivalent workers. The different effects of immigration on native outcomes in the area and factor proportions methodologies appear to result from the diluting effect of native migration flows across regions and failure to take adequate account of other regional labor market conditions in area comparisons.

Suggested Citation

  • George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1996. "Searching for the Effect of Immigration on the Labor Market," NBER Working Papers 5454, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5454
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    References listed on IDEAS

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    1. Borjas, George J. & Freeman, Richard B. (ed.), 1992. "Immigration and the Work Force," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226066332, June.
    2. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1992. "On the Labor Market Effects of Immigration and Trade," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 213-244, National Bureau of Economic Research, Inc.
    3. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    4. Randall Filer, 1992. "The Effect of Immigrant Arrivals on Migratory Patterns of Native Workers," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 245-270, National Bureau of Economic Research, Inc.
    5. Joseph G. Altonji & David Card, 1991. "The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 201-234, National Bureau of Economic Research, Inc.
    6. Abowd, John M. & Freeman, Richard B. (ed.), 1991. "Immigration, Trade, and the Labor Market," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226000954, June.
    7. Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 1-84.
    8. John M. Abowd, 1991. "Appendix: The NBER Immigration, Trade, and Labor Markets Data Files," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 407-421, National Bureau of Economic Research, Inc.
    9. Joseph G. Altonji & David Card, 1989. "The Effects of Immigration on the Labor Market Outcomes of Natives," NBER Working Papers 3123, National Bureau of Economic Research, Inc.
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