Immigrants, Minorities, and Labor Market Competition

Abstract

This paper analyzes the extent of labor market competition among immigrants, minorities and the native population. The study reveals that immigrants tend to be substitutes with some labor market groups, and complements with others. However, all these effects of shifts in immigrant supply on the earnings of native-born men are numerically very small, so that even if immigrants are substitutes with some native-born groups their numerical impact on the native-born wage is trivial. In addition, increases in the supply of immigrants do have a sizable impact on the earnings of immigrants themselves. Increases of 10 percent in the supply of immigrants reduce the immigrant wage by about 10 percent. Thus the main competitors of immigrants in the labor market are other immigrants.