By Robin Lundh, Research Manager and Karen Aho, Consultant
A new National Bureau of Economic Research working paper confirms that immigration continues to benefit American workers. The study finds that recent increases in immigration to the United States correlate with more jobs and higher wages for U.S.-born workers.
“Even when these two groups [immigrants and the U.S.-born] have similar education and age, their employment in the labor market shows a significant degree of complementarity, implying that they do not compete for jobs, but rather the employment of one group helps the productivity of the other,” the authors write.
The research, from University of California-Davis economists Giovanni Peri and Alessandro Caiumi, builds upon decades of previous research from Peri and others on the impact of immigration on the wages and employment of U.S.-born workers.
Consistently, economists have found that an increase in immigration rates does not cause a drop in wages for U.S.-born workers. Immigrants don’t often compete for the same jobs as the U.S.-born, but instead complement the existing workforce with different skills and specializations. This boosts productivity and, in turn, wage growth for U.S.-born workers.
The additional labor also attracts investment, generating economic activity. “It becomes clear,” Peri wrote in 2006, “that immigration has a positive effect on the wages of most native-born workers.”
The current research looks at the years 2000 to 2019, a period during which the country added 13.2 million immigrants and the share of immigrants rose from 11.1% to 13.7% of the American population. The updated research analyzes the effects of immigration on the employment and wages of workers of different educational backgrounds. Among its findings:
- Increases in immigrant populations between 2000 and 2019 did not correspond with a displacement of U.S.-born workers. Immigrant workers did not crowd out or take jobs from U.S.-born workers.
- Increases in immigrant populations were associated with increases in the proportion of U.S.-born citizens who were employed during this time period. These increased employment rates were apparent among both full-time workers and other workers.
- An increase in immigration did not lower the wages of U.S.-born workers. In fact, the inflow of immigration from 2000 to 2019 was associated with a 1.7% to 2.6% increase in the wages of S.-born workers with a high school degree or less. This group’s wages experienced a decline over this period, after adjusting for inflation; that decline would have been more pronounced without the increase in immigrants.
- From 1980 to 2019, the researchers estimated that an increase of 10% in immigration was associated with wage increases of 0.2% for full-time U.S.-born workers and 0.3% for all U.S.-born workers. From 2000 to 2019, a 10% increase in immigration corresponded to wage increases of 0.1% for full-time U.S.-born workers and 0.2% for all U.S.-born workers.
As immigration rose, wages increased most notably for less-educated U.S.-born workers. And the same time, in what the authors called “occupational upgrades,” the employment rate rose for higher-educated U.S.-born workers suggesting that U.S.-born workers were moving into higher-skilled and higher-paying jobs. Neither group saw a negative effect on wages or employment.
Peri and Caiumi’s research demonstrates that neither the jobs nor the wages of U.S.-born workers were negatively impacted by the inflow of immigrants over the last 20 years. Furthermore, the pay rate of non-college-educated U.S. workers actually rose. This suggests that the United States would benefit by allowing foreign-born workers entry to help industries in dire need of labor, such as construction, hospitality, and health care.
As Peri himself told Forbes, “This is a very good time to expand legal immigration, make it a more orderly and an employment-driven process, and benefit from it.”
FILED UNDER: Economics