The employment-to-population rate of high-school aged youth has fallen by about 20
percentage points since the late 1980s. The human capital implications of this decline
depend on the reasons behind it. In this paper, I demonstrate that growth in the
number of less-educated immigrants may have considerably reduced youth
employment rates. This finding stands in contrast to previous research that generally
identifies, at most, a modest negative relationship across states or cities between
immigration levels and adult labor market outcomes. At least two factors are at work:
there is greater overlap between the jobs that youth and less-educated adult
immigrants traditionally do, and youth labor supply is more responsive to
immigration-induced changes in their wage. Despite a slight increase in schooling rates
in response to immigration, I find little evidence that reduced employment rates are
associated with higher earnings ten years later in life. This raises the possibility that an
immigration-induced reduction in youth employment, on net, hinders youths’ human
capital accumulation.