Substitution Between Immigrants, Natives, and Skill Groups

George Borjas, Jeffrey Grogger and Gordon Hanson

No 17461, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The wage impact of immigration depends crucially on the elasticity of substitution between similarly skilled immigrants and natives and the elasticity of substitution between high school dropouts and graduates. This paper revisits the estimation of these elasticities. The U.S. data indicate that equally skilled immigrants and natives are perfect substitutes. The value of the second elasticity depends on how one controls for changes in demand that have differentially affected high school dropouts and graduates. The groups are imperfect substitutes under standard trend assumptions, but even slight deviations from these assumptions can lead to an outright rejection of the CES framework.

JEL-codes: J61 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-lab, nep-lma, nep-ltv and nep-mig
Note: ITI LS
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Citations: View citations in EconPapers (49)

Published as “Comment: Substitution between Immigrants, Natives, and Skill Groups.” Journal of the European Economic Association, 10(1), 2012. (with George Borjas and Jeffrey Grogger)

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