The Labor Market Impact of Immigration: Job Creation versus Job Competition

2020/12/30 by Christoph Albert · 1 citation
Social Sciences · Economics, Econometrics and Finance · #Migration and Labor Dynamics #Labor market dynamics and wage inequality #Migration, Ethnicity, and Economy

paper · doi:10.1257/mac.20190042

openalex publication_date 2020/12/30 · openalex created_date 2025/10/10 · openalex updated_date 2026/05/31

Abstract

This paper studies the labor market effects of both documented and undocumented immigration in a search model featuring nonrandom hiring. As immigrants accept lower wages, they are preferably chosen by firms and therefore have higher job finding rates than natives, consistent with evidence found in US data. Immigration leads to the creation of additional jobs but also raises competition for natives. The dominant effect depends on the fall in wage costs, which is larger for undocumented immigration than it is for legal immigration. The model predicts a dominating job creation effect for the former, reducing natives’ unemployment rate, but not for the latter. (JEL E24, J15, J23, J31, J61, M51)

Citations

• The labor market effects of reducing the number of illegal immigrants
• Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants
• Large Sample Properties of Generalized Method of Moments Estimators
• Undocumented workers in the labor market: An analysis of the earnings of legal and illegal Mexican immigrants in the United States
• Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration
• Immigration and Inequality
• The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market
• The economic contribution of unauthorized workers: An industry analysis
• Rethinking the Effect of Immigration on Wages

Cited by

• Illegal immigration to the United States [wikipedia]