The Effect of Immigrants on the Employment and Wages of Native Workers
Evidence from the 1970s and 1980s
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The effects of immigrants on the employment and wages of native-born workers during the 1970s and 1980s are estimated. Differences are found across skill and demographic groups, and across time, with the largest effects on the least skilled workers. Estimates imply that the 5 percentage point increase between 1970 and 1990 in the share of the workforce that was foreign-born led to a decline in the weekly wages of high school dropouts of at most 10 percent. The effects on employment and participation are also sizable for some demographic/skill groups. Controlling for cost-of-living and addressing endogeneity in the "area analyses" approach are found to be crucial, reversing the sign of the estimated effects in several instances. While the effects on the least educated workers may be substantial, the economy-wide effects are small.
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