Rethinking the effects of immigration on wages

This paper asks the following important question: what was the effect of surging immigration on average and individual wages of U.S.-born workers during the period 1990-2004? Building on section VI I of Borjas (2003) we emphasize the need for a general equilibrium approach to analyze this problem. The impact of immigrants on wages of US born workers can be evaluated only by accounting carefully for labor market and capital market interactions in production. Using such a general equilibrium approach we estimate that immigrants are imperfect substitutes for U.S.-born workers within the same education and experience group (because they choose different occupations and have different skills). Moreover, accounting for reasonable speed of adjustment of physical capital we show that most of the wage effects of immigration accrue to native workers already within a decade. These two facts, overlooked by the previous literature, imply a positive and significant effect of the 1990-2004 immigration on the average wage of U.S.-born workers overall, both in the short and in the long run. This positive average effect resulted from a positive effect on wages of all US-born workers with at least a high school degree and a small negative effect on wages of U.S born workers with no high school degree. --Immigration,Skill Complementarities,Average Wage,Wage Dispersion,Physical Capital Adjustment

Immigration and National Wages: Clarifying the Theory and the Empirics

This paper estimates the effects of immigration on wages of native workers at the national U.S. level. Following Borjas (2003) we focus on national labor markets for workers of different skills and we enrich his methodology and refine previous estimates. We emphasize that a production function framework is needed to combine workers of different skills in order to evaluate the competition as well as cross-skill complementary effects of immigrants on wages. We also emphasize the importance (and estimate the value) of the elasticity of substitution between workers with at most a high school degree and those without one. Since the two groups turn out to be close substitutes, this strongly dilutes the effects of competition between immigrants and workers with no degree. We then estimate the substitutability between natives and immigrants and we find a small but significant degree of imperfect substitution which further decreases the competitive effect of immigrants. Finally, we account for the short run and long run adjustment of capital in response to immigration. Using our estimates and Census data we find that immigration (1990-2006) had small negative effects in the short run on native workers with no high school degree (-0.7%) and on average wages (-0.4%) while it had small positive effects on native workers with no high school degree (+0.3%) and on average native wages (+0.6%) in the long run. These results are perfectly in line with the estimated aggregate elasticities in the labor literature since Katz and Murphy (1992). We also find a wage effect of new immigrants on previous immigrants in the order of negative 6%.Less Educated Workers, Physical Capital Adjustment, Skill Complementarities and Wages

The Labor Market Impact of Immigration in Western Germany in the 1990's

In this article we measure the effects of recent immigration on the Western German labor market looking at both wage and employment effects. Refining administrative data for the period 1987-2001 to account for ethnic German immigrants and immigrants from Eastern Germany, we find that the substantial immigration of the 1990's had very little adverse effects on native wages and on their employment levels. Instead, it had a sizable adverse employment effect as well as a small adverse wage effect on previous waves of immigrants. These asymmetric results are partly driven by a higher degree of substitution between old and new immigrants in the labor market. In a simple calculation we show that the largest aggregate effect of new immigration on natives and old immigrants comes from the increased costs of unemployment benefits to old immigrants. Those costs could be eliminated in a world of wage flexibility and no unemployment insurance in which immigration would not have any negative employment effect but only moderate wage effects.International Migration, Remittances

The Labor Market Impact of Immigration in Western Germany in the 1990's

We adopt a general equilibrium approach in order to measure the effects of recent immigration on the Western German labor market, looking at both wage and employment effects. Using the Regional File of the IAB Employment Subsample for the period 1987- 2001, we find that the substantial immigration of the 1990's had no adverse effects on native wages and employment levels. It had instead adverse employment and wage effects on previous waves of immigrants. This stems from the fact that, after controlling for education and experience levels, native and migrant workers appear to be imperfect substitutes whereas new and old immigrants exhibit perfect substitutability. Our analysis suggests that if the German labor market were as “flexible” as the UK labor market, it would be more effcient in dealing with the effects of immigration.Immigration, Skill Complementarities, Employment, Wages.

An approach to the multidimensional assessment of food security and environmental sustainability: a vulnerability framework for the Mediterranean region

Poster presented at First International Conference on Global Food Security. Noordwijkerhout (The Netherlands), 29 Sep - 2 Oct 201

Multidimensional assessment of food security and environmental sustainability: a vulnerability framework for the Mediterranean Region [Poster]

Poster presented at Tropentag 2013. International Research on Food Security, Natural Resource Management and Rural Development. "Agricultural development within the rural-urban continuum". Stuttgart-Hohenheim (Germany), Sep 17-19 2013

The labor market impact of immigration in Western Germany in the 1990's

We adopt a general equilibrium approach in order to measure the effects of recent immigration on the Western German labor market, looking at both wage and employment effects. Using the Regional File of the IAB Employment Subsample for the period 1987-2001, we find that the substantial immigration of the 1990's had no adverse effects on native wages and employment levels. It had instead adverse employment and wage effects on previous waves of immigrants. This stems from the fact that, after controlling for education and experience levels, native and migrant workers appear to be imperfect substitutes whereas new and old immigrants exhibit perfect substitutability. Our analysis suggests that if the German labor market were as 'flexible' as the UK labor market, it would be more efficient in dealing with the effects of immigration. --Immigration,Skill Complementarities,Employment,Wages

An approach to the multidimensional assessment of food security and environmental sustainability: a vulnerability framework for the Mediterranean region

Poster presented at First International Conference on Global Food Security. Noordwijkerhout (The Netherlands), 29 Sep - 2 Oct 201

The Labor Market Impact of Immigration in Western Germany in the 1990’s

We adopt a general equilibrium approach in order to measure the effects of recent immigration on the Western German labor market, looking at both wage and employment effects. Using the Regional File of the IAB Employment Subsample for the period 1987-2001, we find that the substantial immigration of the 1990’s had no adverse effects on native wages and employment levels. It had instead adverse employment and wage effects on previous waves of immigrants. This stems from the fact that, after controlling for education and experience levels, native and migrant workers appear to be imperfect substitutes whereas new and old immigrants exhibit perfect substitutability. Our analysis suggests that if the German labor market were as ‘flexible’ as the UK labor market, it would be more efficient in dealing with the effects of immigration.Immigration, Skill Complementarities, Employment, Wages