Wage and employment effects of immigration

Priyaranjan Jha and Chu Ji

Chapter 48 in Elgar Encyclopedia of International Trade, 2026, pp 247-252 from Edward Elgar Publishing

Abstract: This entry reviews how immigration affects native wages and employment. Early spatial studies (e.g., Mariel Boatlift) typically find small average effects on natives, while national “skill-cell” analyses initially suggested larger negative impacts for low-educated workers. Subsequent research shows these results hinge on substitutability assumptions: immigrants and natives often specialize in different tasks, and natives adjust by shifting occupations or skills, muting wage pressure. Recent national evidence indicates complementarities dominate on average, with small to modest gains for many natives and most competitive effects borne by earlier immigrants. Local impacts vary with institutions and adjustment margins, and identification choices (e.g., shift-share IV) matter for short- vs. long-run estimates. Emigration can raise wages in origin countries and may yield “brain gain” under some conditions. Overall, aggregate effects are modest, distributional impacts are real, and policies can ease adjustment while preserving gains.

Keywords: Immigration; Wages; Employment; National skill-cell approach; Task specialization; Emigration and brain drain (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035327492
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