Central Data Catalog

Citation Information

Type Working Paper
Title The effects of immigration on California's labor market
Author(s)
Publication (Day/Month/Year) 2006
URL https://www.econstor.eu/bitstream/10419/31377/1/571800742.pdf
Abstract
As of 2004 California employed almost 30% of all foreign born workers in the U.S. and was the state with
the largest percentage of immigrants in the labor force. It also received a very large number of Mexican and
uneducated immigrants during the recent decades. If immigration harms the labor opportunities of natives,
especially the least skilled ones, in the form of downward wage pressure, pressure to move out of the state
or increased likelihood to loose their jobs, California was the place where these effects should have been
stronger. By analyzing the behavior of population, employment and wages of U.S. natives in California in
the period 1960-2004 we address this issue. We consider workers of different education and age as imperfectly
substitutable in production and we exploit the differences in immigration across these groups to infer their
impact on US natives. Our estimates use international migration to other U.S. states as instrument for
international migration to California to isolate the ”supply-driven” variation of immigrants across skills and
identify the labor market responses of natives. We find that in the considered period immigration did not
produce significant migratory response or loss of jobs of natives. Moreover we find that immigrants were
imperfect substitutes for natives of similar education and age, hence they stimulated, rather than harmed
the demand and wages of U.S. native workers.

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