The Elasticity of Substitution between Native and Immigrant Labor: A Meta-Analysis

Klára Kantová, Tomas Havranek and Zuzana Irsova

No 2025/08, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This paper presents the first comprehensive meta-analysis of the elasticity of substitution between native and immigrant labor. Drawing on 1,091 estimates from 41 studies, we examine whether immigrants and natives compete in the same labor markets, and to what extent published estimates are shaped by methodological choices and publication bias. We find strong evidence of small-study effects: less precise estimates are associated with lower elasticities, which is consistent with selective reporting. Correcting for these biases using a wide array of techniques (linear, nonlinear, and selection models) raises the mean implied elasticity from 13 to approximately 20. Model averaging techniques reveal that data features, such as experience level, wage definition, and region, explain much of the heterogeneity in reported results. Notably, the often-cited discrepancy between using log(mean wages) and mean(log wages) largely disappears once publication bias is accounted for. Our findings imply that immigrants and natives are imperfect substitutes but more substitutable than is commonly assumed.

Keywords: elasticity of substitution; immigration; native labor; metaanalysis; publication bias (search for similar items in EconPapers)
JEL-codes: C83 J15 J61 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2025-04, Revised 2025-04
New Economics Papers: this item is included in nep-lab and nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2025_08

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