Skill Differences and the Effect of Immigrants on the Wages of Natives
Posted: 19 May 1998
Date Written: March 1996
This paper examines the effects of changes in the supply of immigrant labor on the wages of natives. Estimates are presented indicating that immigrants and natives are nearly perfect substitutes within broad skill categories. This result is then used to calculate the effects of the large influx of immigrants to the U.S. labor market during the 1980s. The calculations presented suggest that immigration depressed the wages of native dropouts by as much as 3 percent and can account for possibly as much as 24 percent of the increase in the college-high school wage differential during the decade.
JEL Classification: J31, J61
Suggested Citation: Suggested Citation