The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives

By Joseph G. Altonji, David Card. Interdisciplinary Perspectives on the New Immigration, 2018

525 citations recorded by the source corpus.

This paper examines the effects of immigration on the labor market outcomes of less-skilled natives. Working from a simple model of a local labor market, we show that the effects of immigration can be estimated from the correlations between the fraction of immigrants in a city and the employment and wage outcomes of natives. The size of the effects depend on the fraction and skill composition of the immigrants. We go on the compute these correlations using city-specific outcomes for individuals in 120 major SMSA's in the 1970 and 1980 Censuses. We also use the relative industry distributions of immigrants and natives to provide a direct assessment of the degree of labor market competition between them. Our empirical findings indicate a modest degree of competition between immigrants and less-skilled natives. A comparison of industry distributions shows that an increase in the fraction of immigrants in the labor force translates to an approximately equivalent percentage increase in the supply of labor to industries in which less-skilled natives are employed. Based on this calculation, immigrant inflows between 1970 and 1980 generated l-2 percent increases in labor supply to these industries in most cities. A comparison of industry distributions of less-skilled natives in high- and low-immigrant share cities between 1970 and 1980 shows some displacement out of low-wage immigrant-intensive industries. We find little effect of immigration on the employment outcomes of the four race/sex groups that we consider. Our estimates of the effect of immigration on the wages of less-skilled natives are sensitive to the specification and estimation procedure. However, our preferred estimates, which are based on first differences between 1980 and 1970 and the use of instrumental variables to control for the endogeneity of immigrant inflows, imply that an increase in immigrants equal to l percent of an SMSA's population reduces native wages by roughly 1.2 percent.(This abstract was borrowed from another version of this item.)

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/d86ffb2dff018cdaa8aea90353120ef83e3a18da

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Citations in the corpus

Immigration and electoral support for the far-left and the far-right (2019, methodology): “This approach has been pioneered by Altonji and Card (1991) and then used in several other studies such as Card (2001); Peri (2012); Borjas (2014); Clemens and Hunt (2017); Edo and Rapoport (2017). Indeed, the settlement decision of new immigrants is partly determined by the presence of earlier immi”
Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis (2020, unknown): “The same exercise, using other decades, delivers lower estimates, see Table 11 in this paper using differences between 1990 and 2000 and the same instrument Altonji and Card (1991) used.”
Shift-Share Instruments and the Impact of Immigration (2018, unknown): “In the hopes of addressing the endogeneity of the location choices of new immigrants with respect to local labor demand, inflows at an aggregate level are typically combined with the lagged geographic distribution of immigrants to create an instrument (Altonji and Card 1991, Card 2001).”
Beautiful city: Leisure amenities and urban growth (2019, background): “Moreover, a long-standing literature demonstrates that their location determinants are mostly related to the existence of ethnic networks and largely insensitive to the economic evolution of U.S. cities (Altonji and Card, 1991, Card, 2001).”
Demographic Origins of the Startup Deficit (2019, methodology): “We use an Altonji and Card (1991)-style instrument which utilizes differences across states in the historical patterns of inter-state migration.”
Mismatch Unemployment and the Geography of Job Search (2018, unknown): “Removing non-consistent observations, duplicates and vacan1This issue is relevant to measure the impact of immigrants on natives’ wages or employment rates (Card, 1990; Altonji and Card, 1991; Friedberg and Hunt, 1995; Borjas et al., 1996, 1997; DiNardo and Card, 2000; Card, 2001, 2005; Borjas, 2003”
Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment (2017, methodology): “It should be noted that in contrast to the change in the local employment-to-population ratio used in many extant studies (see, e.g., Altonji and Card 1991; Dustmann, Fabbri, and Preston 2005; Boustan, 21.”