Abstract

This paper was prepared as a contribution to the Trade and Immigration Project of the National Bureau of Economic Research. We have also received research support from the Center for Urban Affairs and Policy Research, Northwestern University and the Industrial Relations Section, Princeton University. We are grateful to John Abowd, Francine Blau, George Borjas, Gregory DeFreitas, Richard Freeman, Peter Kuhn, and participants in seminars at Columbia University, the University of Minnesota, Princeton University and the National Bureau of Economic Reseach for comments on earlier drafts. THE EFFECTS OF IMMIGRATION ON THE LABOR MARKET OUTCOMES OF LESS-SKILLED NATIVES This paper examines the effects of immigration on the labor market outcomes of less-skilled natives. Working from a simple model of a local labor market, we show that the effects of immigration can be estimated from the correlations between the fraction of immigrants in a city and the employment and wage outcomes of natives. The size of the effects depend on the fraction and skill composition of the immigrants. We go on the compute these correlations using city-specific outcomes for individuals in 120 major SMSA's in the 1970 and 1980 Censuses. We also use the relative industry distributions of immigrants and natives to provide a direct assessment of the degree of labor market competition between them. Our empirical findings indicate a modest degree of competition between immigrants and less-skilled natives. A comparison of industry distributions shows that an increase in the fraction of immigrants in the labor force translates to an approximately equivalent percentage increase in the supply of labor to industries in which less-skilled natives are employed. Based on this calculation, immigrant inflows between 19...

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