PDF Document, 2.29MB4. Conclusions
This paper has surveyed a small part of a vast professional literature on
the labor market effects new immigrants, focusing on recent studies that have
employed various econometric techniques to estimate the wage effects of
less-skilled immigrants during the two great American immigration surges
(1870-1914 and 1980 to the present). To say that this is a highly contentious
literature would be an understatement. But while the interchanges have been
heated and even hostile, a birds-eye view suggests that there is a rough
consensus, not dissimilar to that found by several influential surveys
published in the 1990s (Smith and Edmonston, 1997; Friedberg and Hunt, 1995,
1999). Based on the econometric studies surveyed here, it seems safe to say
that there is considerable evidence that large surges of less-skilled
immigration have generated at least small negative wage effects for less
advantaged members of the labor force: less-educated blacks, native-born
Hispanics, and immigrants themselves, particularly in the major
immigrant-receiving metropolitan areas.
Given that high unemployment and jobless rates for less skilled native-born
workers persist in the main immigration gateway cities even in the best of
times (the late 1990s, for example), the main question for researchers might be
why there isn’t a more consistent finding of substantial wage and
employment effects. On opposite ends of this debate, both Borjas (2003) and
Card (2005) seem still puzzled by the weakness of most findings. Given the
strength of his own factor proportions (1997) and time series results (2003),
Borjas asks, but has no answer, for “why the spatial correlation approach fails
to find these effects” (p. 36). On the other side, failing to find either
wage flexibility or industry mix flexibility in response to large supply shocks
uncompensated for by native outflows, Card and Lewis (2005) are forced to
conclude that employers must be adjusting skill intensity in the workplace with
a “remarkable flexibility” (p. 26).
The reality may be that there are sizable but hard-to-measure wage and
employment effects because of the very nature of the problem – a large share of
less-skilled new immigrants are undocumented workers who are self-employed or
are employed by individuals or small family businesses. For many years, public
policy has more than tolerated the employment of undocumented immigrants
fearful of both employers and public authorities. In this setting, it may be
too much to ask of the aggregate data to tease out precise and robust
employment and wage effects. But we should also recognize that there may be
equally important effects on the quality of jobs and the employment
relationship. As Sum et al. put it, “The growing inflow of illegal-immigrant
workers has contributed to a fundamental breakdown in the nation’s labor laws
and labor standards as the sheer volume of illegal hiring activity overwhelms
what has amounted to meager enforcement levels…” (p. 10).
Although the strength of our desire for social protection waxes and wanes over
the course of time, the history of wage labor over the last two centuries is
replete with evidence that increasing new supplies of less-skilled labor is
harmful to current workers. In Volume I of Capital, Marx documented
the role played by women and children in undermining male worker bargaining
power in the early stages of the industrial revolution. The recent dependence
of many employers on undocumented new immigrants while at the same time
advocating for an even more de-regulated labor market suggests that a similar
role is played today by immigrant workers.
On balance, the findings of recent econometric research seem consistent with
the anecdotal evidence of rising wages and increasing job opportunities for
local African-American workers in the recent enforcement episode in Stillmore,
Georgia: the post-1980 surge in less skilled and heavily undocumented
immigrants in largely unregulated labor markets contributes to downward wage
and employment rates at the bottom of the labor market. While many consumers
and employers (individuals and firms) have certainly benefited substantially
from the surge in undocumented low-skilled workers since the mid-1980s,
these research findings suggest a need for policy interventions that ensure
socially acceptable wage levels, employment opportunities, and working
conditions for our least advantaged workers, both native- and foreign
born.
Endnotes
1 Louis Uchitelle, New York Times, March 9, 2001 (p. A1)
2 David Barboza, New York Times, December 21, 2001 (p. A26)
3 Rebecca Blank, “A Review of the Labor /Market Discussion in the 2006 Economic Report of the President,” Journal of Economic Literature, Sept. 2006 (669-673)
4 Philip Brasher, “ID theft probe began in Marshalltown,” The Des Moines Register, Dec. 13, 2006.
5 Evan Perez and Corey Dade, “An Immigration Raid Aids Blacks – For a Time,” The Wall Street Journal, p. 1.
6 The assumption here is that we do not live in a world characterized by what economists call “factor price equalization,” in which unhindered trade ensures that all factors (including low skill workers) are everywhere paid the same (have the same price). This has the interesting consequence that there is no economic incentive for labor migration in the first place (see Friedberg and Hunt, 1999, p. 344).
7 On the unfortunate role that theoretical priors appear to play in other areas of recent empirical research, see Freeman (2005).
8 There are several advantages to this “jobs” approach. First, if wage-setting is best understood as a response to supply, demand and institutional forces at the jobs level in a particular sector, using jobs as the unit of analysis (for example, laborers in construction firms, or cashiers in retail outlets) should be preferable education or education-experience groups.
9 Borjas seems to concede here that the evidence does not show large native outflows in response to immigrant inflows.
References
Blank, Rebecca, “A Review of the Labor /Market Discussion in the 2006 Economic
Report of the President,” Journal of Economic Literature, (September
2006): 669-673.
Borjas, George, Heaven’s Door. (Princeton: Princeton University Press,
1999).
Borjas, George, “The Labor Demand Curve is Downward Sloping: Reexamining the
Impacts of Higher Immigration,” Quarterly Journal of Economics 118,
(November 2003): 1335-1374.
Borjas, George J., Richard B. Freeman, and Lawrence F. Katz, “On the Labor
Market Effects of Immigration and Trade,” In G. Borjas and R. Freeman, eds.,
Immigration and the Workforce: Economic Consequences for the United States
and Source Areas, (Chicago: University of Chicago Press): 213-44.
Borjas, George J., Richard B. Freeman, and Lawrence F. Katz, “How Much Do
Immigration and Trade Affect Labor Market Outcomes?” Brookings Papers on
Economic Activity, 1, (1997): 1-67.
Butcher, Kristin F., “An Investigation of the Effect of Immigration on
the Labor-Market Outcomes of African Americans,” in D. Hamermesh and F. Bean,
eds. Help or Hindrance (New York: Russell Sage Foundation,1998):
149-181.
Card, David, “The Impact of the Mariel Boatlift on the Miami Labor Market,”
Industrial and Labor Relations Review, XLIII (1990), 245-257.
Card, David, “Immigrant Inflows, Native Outflows, and the Local Labor Market
Impacts of Higher Immigration,” Journal of Labor Economics, XIX
(2001): 22-64.
Card, David and John DiNardo, “Do Immigrant Inflows Lead to Native Outflows?”
American Economic Review 90 (May 2000).
Card, David and Ethan G. Lewis, “The Diffusion of Mexican Immigrants During the
1990s: Explanations and Impacts,” NBER Working Paper 11552: (2005).
Carter, Susan B. and Richard Sutch, “Historical Perspectives on the Economic
Consequences of Immigration into the United States,” in C. Hirschman, P.
Kasinitz, and J. DeWind, eds, The Handbook of International Migration: The
American Experience (New York: Russell Sage Foundation, 1999):
319-341.
Carter, Susan B. and Richard Sutch, “Labour Market Flooding? Migrant
Destination and Wage Change during America’s Age of Mass Migration,”
manuscript, (July 24, 2006).
Catanzarite, Lisa, “Immigrant Latino Representation and Earnings Penalties in
Occupations,” Research in Social Stratification and Mobility, vol. 16
(1998): 147-179.
Friedberg, Rachel M. and Jennifer Hunt, “The Impact of Immigration on Host
Country Wages, Employment and Growth,” Journal of Economic
Perspectives, IX (1995): 23-44.
Freeman, Richard, “Labour Market Institutions Without Blinders: The Debate Over
Labour Market Flexibility and Performance,” NBER Working Paper 11286 (April
2005).
Goldin, Claudia, The Political Economy of Immigration Restriction in the United
States, 1890 to 1921, in Goldin and Libecap eds., The Regulated Economy: A
Historical Approach to Political Economy, (Chicago: University of Chicago
Press, 1994): 223-58.
Hatton Timothy J. and Jeffrey G. Williamson, The Age of Mass Migration: An
Economic Analysis, (New York: Oxford University Press, 1998).
Hatton, Timothy J. and Jeffrey G. Williamson, “What Determines Immigration’s
Impact? Comparing Two Global Centuries,” NBER Working Paper 12414 (July
2006).
Howell, David R. and Elizabeth Mueller, “Immigration and Native-Born Male
Earnings,” Journal of Ethnic and Migration Studies 26, (July 2000):
469-493.
Lewis, Ethan G. “The Effect of Local Skill Mix on New Technology Adoption in
U.S. Manufacturing,” Federal Reserve Bank of Philadelphia, Unpublished Working
Paper (December 2004).
Manacorda, Marco, Alan Manning and Jonathan Wadsworth, “The Impact of
Immigration on the Structure of Male Wages: Theory and Evidence from Britain,”
CEP Discussion Paper No. 754 (Centre for Economic Performance, London School of
Economics), October 2006.
Ottaviano, Gianmarco I.P. and Giovanni Peri, “Rethinking the Effects of
Immigration on Wages,” NBER Working Paper 12497 (August 2006).
Reimers, Cordelia W., “Unskilled Immigration and Changes in the Wage
Distributions of Black, Mexican American, and Non-Hispanic White Male
Dropouts,” in D. Hamermesh and F. Bean, eds. Help or Hindrance (New
York: Russell Sage Foundation, 1998): 107-148.
Smith, James P., and Barry Edmonston, eds., The New Americans: Economic,
Demographic, and Fiscal Effects of Immigration (Washington D.C.: National
Academy Press, 1997).
Sum, Andrew, Paul Harrington, and Ishwar Khatiwada, “The Impact of New
Immigrants on Young Native-Born Working, 2000-2005,” Center for Immigration
Studies Backgrounder (September 2006).
