Immigration's Effect on US Wages and Employment Redux

Alessandro Caiumi and Giovanni Peri

No 21756, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This article revives and enhances the factor-supply approach to estimate the effects of changes in immigrant supply on wages and employment of US natives. We introduce and validate a skill-based shift-share IV for immigrants’ labor supply. We find a positive impact of immigration on natives' employment and significant imperfect substitutability between natives and immigrants. Consistent with these estimates, we find significant task complementarity and occupational upgrading of native workers in response to immigrants. Finally, we calculate that immigration over 2000-2023 increased wages of non-college-educated natives by 2.6 to 3.4%, with small effects on other groups.

Keywords: Immigration; Wages; Employment (search for similar items in EconPapers)
JEL-codes: F22 J21 J69 (search for similar items in EconPapers)
Date: 2026-07
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