Immigrants, Skills, and Wages

From the American Immigration Law Foundation:

IMMIGRANTS,SKILLS, AND WAGES:
Reassessing the Economic Gains from Immigration

byGiovanni Peri, Ph.D.

Foreign-bornworkers do not substitute perfectly for, and therefore do not compete with,most native-born workers. Rather, the complementary nature of the skills,occupations, and abilities of foreign-born workers increases the productivityof natives, stimulates investment, and enhances the choices available to consumers.As a result, immigration increases the average wages of all native-bornworkers, except those who do not have a high-school diploma. Even for the smalland shrinking number of native-born workers without a high-school diploma, thedecline in wages from immigration is much smaller than some have estimated. Awell-balanced immigration policy that attracts foreign-born workers at bothends of the educational spectrum would maximize the economic benefits ofimmigration for the native-born and build on the traditional appeal of theUnited States as a country of destination for both highly skilled andless-skilled immigrants.

Amongthe findings of this report:

· Immigration raised the average wage of the native-bornworker by 1.1 percent during the 1990s. Among native-born workers with ahigh-school diploma or more education, wages increased between 0.8 percent and1.5 percent. Among native-born workers without a high-school diploma, wagesdeclined by 1.2 percent.

· Most foreign-born workers either lack a high-school diplomaor have at least a bachelor’s degree, while most native-born workers eitherhave a high-school diploma or some college short of a four-year degree.

· Since workers with different levels of education performdifferent tasks and fill different roles in production, the majority ofnative-born workers (those with intermediate educational levels) experiencebenefits, more than competition, from foreign-born workers concentrated in highand low educational groups.

· Even among workers with the same level of formal education,the foreign-born tend to be employed in different occupations than U.S.natives. Less-educated foreign-born workers, for instance, are found mostly inagricultural and personal service jobs, while less-educated natives are foundmostly in manufacturing and mining.

· The relatively large positive effect of highly skilledimmigrants on the wages of native-born workers with a college degree or more isdriven by the fact that creative, innovative, and complex professions benefitparticularly from the complementarities brought by foreign-born scientists,engineers, and other highly skilled workers.

· Family reunification policies have served the purpose ofkeeping earlier immigrants favorable to new immigration, while purely economicconsiderations would lead them to turn against new immigrants in order toreduce competition for jobs.

Read the entire report at: http://www.ailf.org/ipc/infocus/2006_skillswages.shtml

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