Working Paper: NBER ID: w21123
Authors: Gihoon Hong; John McLaren
Abstract: Most research on the effects of immigration focuses on the effects of immigrants as adding to the supply of labor. By contrast, this paper studies the effects of immigrants on local labor demand, due to the increase in consumer demand for local services created by immigrants. This effect can attenuate downward pressure from immigrants on non-immigrants' wages, and also benefit non-immigrants by increasing the variety of local services available. For this reason, immigrants can raise native workers' real wages, and each immigrant could create more than one job. Using US Census data from 1980 to 2000, we find considerable evidence for these effects: Each immigrant creates 1.2 local jobs for local workers, most of them going to native workers, and 62% of these jobs are in non-traded services. Immigrants appear to raise local non-tradables sector wages and to attract native-born workers from elsewhere in the country. Overall, it appears that local workers benefit from the arrival of more immigrants.
Keywords: No keywords provided
JEL Codes: F22; F66
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| immigrants (F22) | local jobs for native workers (J68) |
| immigrants (F22) | local demand for services (R22) |
| local demand for services (R22) | demand for labor (J23) |
| increased consumer demand (R22) | demand for labor (J23) |
| demand for labor (J23) | real wages for native workers (J39) |
| immigrants (F22) | downward pressure on wages (F66) |
| downward pressure on wages (F66) | real wages for native workers (J39) |