Groups in favor of reducing immigration often voice the concern that immigrants compete with native-born Americans for jobs, and that this competition reduces the rates at which native U.S. workers are employed. This perspective often stems from the basic economic law of supply and demand in which an increase in the supply of workers should push down wages or produce unemployment when other things are held constant.
It is true that the laws of supply and demand apply to all participants in the U.S. economy; all residents, businesses, workers, and owners of capital must reckon with the market conditions where they operate. But U.S. workers are not a monolithic group, nor are U.S. businesses, consumers, or immigrants. While many immigrants have low levels of education compared to natives, some possess advanced degrees. Similarly, U.S. workers are a diverse group. Not all U.S. workers compete with immigrant labor; some are coworkers or supervisors who benefit from their presence. In reality, combinations and adjustments in the economy means that the actual impact of immigration on U.S. jobs could be negative, could be zero, or could even be positive if immigration expands new business opportunities by stimulating demand. We need to examine real-world data in order to reveal the true story about the impact of immigration on the U.S. job market.
When we examined trends in employment rates of native U.S. workers compared to trends in foreign-born shares of the local labor force between 2005 and 2016, we found that employment rates for native workers actually rose by a small amount when more immigrants arrived. This pattern held true across a diverse set of U.S. regions and did not reflect any exodus of native workers from the labor force. The data show that the presence of immigrant labor coincided with enhanced employment opportunities for native workers during this period, meaning that the arrival of these individuals does not reduce native employment rates.
These results have significant implications for the policy debate around immigration. While economic vulnerability among U.S. workers and families is a real phenomenon, our finding—especially the fact that immigration does not coincide with lower native employment rates—should lead to a reassessment of policies that seek to restrict immigration because of an assumption that immigrants take jobs from native workers. We believe that policymakers should approach reforms to immigration policy based on the evidence, which does not show significant job effects of immigration.
This study employs a difference in differences estimation to distill the effect of increasing levels of immigration on native-born employment, and finds that immigration is positively correlated with enhanced employment opportunities for natives. These results lend credence to the belief that immigrants boost the economic prospects of America and its workers writ large.
|1. Over the past decade, increases in the foreign-born labor force have been associated with rising native employment rates.|
|2. Specifically, an increase of 20 immigrant workers is associated with about one native job created.|
|3. This pattern holds true across a diverse set of U.S. regions and does not reflect any exodus of native workers from the labor force.|
|4. The positive effect of immigration is stronger among natives with more education.|
|5. The results remain consistent even after controlling for several variables that could also affect employment rates, such as: race, educational attainment, and gender.|
This research ultimately provides compelling evidence that foreign- and native-born workers do not compete for jobs. Rather, native workers might combine with new immigrant labor in productive ways that create more employment opportunities for natives. Ultimately, the economy is dynamic, and higher levels of workers leads to increases in productivity and wealth generation, which benefits the United States as a whole.