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The Effects of Immigrants on African-American Earnings: A Jobs- Level Analysis of the New York City Labor Market, 1979-89

Listed author(s):
  • David R. Howell

    (The Jerome Levy Economics Institute)

  • Elizabeth J. Mueller

    (The Jerome Levy Economics Institute)

The improvement in the relative economic status of African-American Workers in the 1960's and 1970's was reversed in the 1980's, a decade that also featured a collapse in the relative (and real) wages of the last skilled (Bound and Freeman, 1992; Blau and Kahn, 1992; Levy and Murnane, 1992). At the same time, the U.S. experienced the largest absolute and per capita levels of immigration since the early part of the century. Significantly, this recent wave of immigrants was far less skilled, at least in terms of educational attainment, than earlier waves of immigrants in the post-war period. Friedberg and Hunt (1995) report that 43% of new immigrants did not possess the equivalent of a high school degree. And according to a recent study by david Jaeger (1995), in the 50 largest metropolitan areas employed male immigrants were about 16% of the civilian workforce with less than a high school degree in 1980; by 1990 this figure was over 30%. For women, this figure rose from 17% to almost 28%. Not surprisingly, there is a concern that growing numbers of immigrant workers have negatively affected the standing of African-American in urban labor markets. But with the exception of Borjas, Freeman and Katz (1996) and Jaeger (1995), the consensus in the research community appears to be that there has been little if any negative wage effects (see the surveys by Borjas, 1994; Friedberg and Hunt, 1995; and DeFreitas, 1996; National Academy of Sciences 1997). This is a rather surprising finding, since it requires a nearly instantaneous adjustment to labor supply shocks in local labor markets. Borjas (1994) terms this an "unresolved puzzle." Indeed, it is a particularly puzzling since the sharp growth in the supply of low-skill immigrants took place during a decade in which the power of labor market institutions to shelter low-skill workers from intense wage competition was severely eroded. In our view, the failure to find earnings effects from sharply rising supplies of low-skill foreign-born workers in increasingly deregulated labor markets may reflect the dominant research methodology, which has been to explore foreign-born workers in increasingly deregulated labor markets may reflect the dominant research methodology, which has been to explore these effects with across- metropolitan tests. Since immigrants are overwhelmingly concentrated in a small number of urban labor markets, such as Los Angeles, New York, Houston, San Francisco, and Miami, we would expect wage effects to be concentrated in these same cities.

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Paper provided by EconWPA in its series Macroeconomics with number 9802002.

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Length: 38 pages
Date of creation: 04 Feb 1998
Handle: RePEc:wpa:wuwpma:9802002
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 38; figures: included
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  1. 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.
  2. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  3. Francine D. Blau & Lawrence M. Kahn, 1992. "Race and Gender Pay Differentials," NBER Working Papers 4120, National Bureau of Economic Research, Inc.
  4. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
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