Rethinking the Effects of Immigration on Wages

Gianmarco Ottaviano and Giovanni Peri

No 12497, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper asks the following question: what was the effect of surging immigration on average and individual wages of U.S.-born workers during the period 1990-2004? We emphasize the need for a general equilibrium approach to analyze this problem. The impact of immigrants on wages of U.S.-born workers can be evaluated only by accounting carefully for labor market and capital market interactions in production. Using such a general equilibrium approach we estimate that immigrants are imperfect substitutes for U.S.- born workers within the same education-experience-gender group (because they choose different occupations and have different skills). Moreover, accounting for a reasonable speed of adjustment of physical capital we show that most of the wage effects of immigration accrue to native workers within a decade. These two facts imply a positive and significant effect of the 1990-2004 immigration on the average wage of U.S.-born workers overall, both in the short run and in the long run. This positive effect results from averaging a positive effect on wages of U.S.-born workers with at least a high school degree and a small negative effect on wages of U.S.-born workers with no high school degree.

JEL-codes: F22 J31 J61 (search for similar items in EconPapers)
Date: 2006-08
New Economics Papers: this item is included in nep-lab
Note: ITI LS
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Citations: View citations in EconPapers (164)

Published as Ottaviano, Gianmarco and Giovanni Peri. “Rethinking the Effects of Immigration on Wages: New Data and Analysis from 1990- 2004” IPC IN FOCUS, the American Immigration Law Foundation's Immigration Policy Center 5, 8 (October 2006).
Published as Gianmarco I. P. Ottaviano & Giovanni Peri, 2012. "Rethinking The Effect Of Immigration On Wages," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 152-197, 02.

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Related works:
Chapter: RETHINKING THE EFFECT OF IMMIGRATION ON WAGES (2021)
Chapter: RETHINKING THE EFFECT OF IMMIGRATION ON WAGES (2016)
Journal Article: RETHINKING THE EFFECT OF IMMIGRATION ON WAGES (2012)
Working Paper: Rethinking the effects of immigration on wages (2007)
Working Paper: Rethinking the Effects of Immigration on Wages (2006)
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