The labor market effects of immigration dissipate rapidly over time and space

Joan Monras

Research output: Other contribution

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Abstract

A number scholars and policy makers alike wonder about the effects of immigration on the labor market outcomes of natives. The classic literature on the topic has not reached an agreement. Some renowned economists, such as recent Nobel Prize winner David Card, suggest that the effects of immigration are minimal. By comparing cities (and occupations) exposed to higher and lower levels of immigration, Card (2001) concludes that immigration did not affect substantially the labor market outcomes of natives. Harvard economist George Borjas reaches different conclusions. He argues that local labor markets in the US are well integrated, which implies that the shocks affecting one local labor market also translate to others nearby. As a result, comparing outcomes across different cities reveals little or nothing about the effects of immigration. Instead, he suggests comparing workers with different skills and experience levels is a more relevant approach (Borjas, 2003). His estimates differ radically from those of David Card. They suggest that immigration harms natives’ employment and wages, particularly among the least educated.
In this literature, the labor market response to immigration is often thought to be a single number: By how much a one-percent increase in labor supply due to immigration changes the wages or employment rates of the natives. Now, is this the right question? In this policy brief, I argue that the best answer to this fundamental question is perhaps not a single number but rather a set of new questions: If there is an effect, does it dissipate over time and space? How long does this diffusion process take? What are the economic mechanisms explaining it?
Original languageEnglish
PublisherLISER
Number of pages6
Place of PublicationEsch-sur-Alzette
Publication statusPublished - 16 Nov 2022
Externally publishedYes

Publication series

NamePolicy Brief
PublisherLISER
No.09
ISSN (Electronic)2716-7437

Keywords

  • Immigration
  • Labor market
  • Housing market

LISER Collections

  • Policy Brief

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