Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration

Abstract

This paper uses 1990 Census data to study the effects of immigrant inflows on the labor market opportunities of natives and older immigrants. I divide new immigrants, older immigrants, and natives into distinct skill groups and focus on skill-group-specific outcomes within cities. An important first question is" whether inflows of new immigrants lead to outflows of natives or earlier immigrants in the same skill groups. Even after accounting for endogenous mobility decisions I find that inter-city migration flows of natives and older immigrants are largely" unaffected by new immigrant inflows. Inflows of new immigrants are associated with lower employment rates among natives and earlier immigrants, but with relatively small effects on the relative wage structure. The estimates imply that immigrant arrivals between 1985 and 1990 depressed the employment rate of low-skilled natives in major U.S. cities by 1-2 percentage points on average, and by substantially more in high-immigrant cities.