Immigration: The Effects on Low-Skilled and High-Skilled Native-Born Workers [January 29, 2009] [open pdf - 250KB]
The large influx of immigrants in recent decades has led to an equally long, still unresolved debate over their effect on the labor market outcomes of native-born workers. Economic theory posits that an increase in the supply of labor, such as from immigration, will reduce the wages and employment of native-born workers. Studies, utilizing two approaches to test the theory, have produced conflicting results with differing implications for public policy. [...] The report opens with a discussion of how to analyze the impact of immigrants on the pay and job opportunities of native-born workers. It then uses this framework to examine and interpret the empirical literature on the subject. The report concludes with a discussion of policy implications. [...] The concentration of foreign-born workers in certain cities and skill groups led some economists to posit that immigration's greatest impact would be felt by similarly skilled native-born workers living in those areas. Studies thus have compared differences in labor market outcomes between native-born workers who live in high- versus low-immigrant areas and who most often compete for jobs with foreign-born workers; given the composition of the recent immigrant flow, these would be low-skilled U.S. workers. Most inter-area analyses have found scant evidence that foreign-born labor adversely affects the labor market prospects of U.S. workers in general. A few inter-area studies have estimated a slight negative impact on low-skilled natives--who represent a small share of total U.S. employment.
CRS Report for Congress, 95-408