Immigrants In, Wages Down

DO immigrants harm the employment prospects of native-born Americans? If so, how serious is the harm? Economists have analyzed these questions for the past quarter-century. Most of the early studies concluded that the wage impact of immigration was small. But newly available evidence is slowly breaking down this consensus. In fact, immigration may have depressed the wages of low-skilled workers by 5 to 8 percentage points.

In the last few weeks, the academic discussion of how best to measure the wage impact of immigration has spilled over into the policy debate over tighter borders, a proposed amnesty for 11 million illegal immigrants, and the adoption of a guest-worker program that would admit around 400,000 temporary workers annually. What does economic theory have to say about the impact of immigration on wages?

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George J. Borjas

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DO immigrants harm the employment prospects of native-born Americans? If so, how serious is the harm? Economists have analyzed these questions for the past quarter-century. Most of the early studies concluded that the wage impact of immigration was small. But newly available evidence is slowly breaking down this consensus. In fact, immigration may have depressed the wages of low-skilled workers by 5 to 8 percentage points.

In the last few weeks, the academic discussion of how best to measure the wage impact of immigration has spilled over into the policy debate over tighter borders, a proposed amnesty for 11 million illegal immigrants, and the adoption of a guest-worker program that would admit around 400,000 temporary workers annually. What does economic theory have to say about the impact of immigration on wages?