The Impact of Immigrants on Host Country Wages, Employment and Growth

TLDR

Empirical evidence does not support the belief that immigrants significantly harm native wages or employment. A 10% rise in immigrant share lowers native wages by 0–1%, does not markedly affect employment or close substitutes, and only influences natives’ income growth when immigrants have high human capital.

Abstract

The popular belief that immigrants have a large adverse impact on the wages and employment opportunities of the native-born population of the receiving country is not supported by the empirical evidence. A 10 percent increase in the fraction of immigrants in the population reduces native wages by 0-1 percent. Even those natives who are the closest substitutes with immigrant labor do not suffer significantly as a result of increased immigration. There is no evidence of economically significant reductions in native employment. The impact on natives’ per capita income growth depends crucially on the immigrants’ human capital levels.