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Are Immigrant Workers Imperfectly Substitutable? Essay

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Many wage studies suggest that immigrant workers are imperfectly substitutable for native-born workers who have similar educational attainment and experience. Relying on U.S. Census and ACS data, I ask, to what degree do language skills drive this? I suggest that immigrants who arrive to the United States at young ages, both have stronger English skills and exhibit greater substitutability for native-born workers than immigrants who arrived later. Similarly, immigrants with poor English skills will be more responsive to the supply of immigrants and their relative wages will suffer more than English-speaking immigrants. In large cities, where Spanish speakers are concentrated, I observe the emergence of a “Spanish-speaking” labor market. In these markets, the benefit of English language proficiency is low. Finally, in Puerto Rico, where almost all workers speak Spanish, immigrants and natives are perfect substitutes.
Studies by researchers ranging from the more conservative George Borjas to the liberal David Card have all found that the massive flow of immigrants into the U.S. has had little negative impact on the average wages of native-born workers. However, many of these same studies find that new immigrants have substantially depressed the wages of previous immigrant arrivals (Card, 2001). In Card’s research, for example, the largest impact of immigration that could be found since 1990 was a 0.1% drop in the average wages of native-born high school dropouts, compared to an 8.1% drop in the wages of other immigrants. By this evidence, the lack of immigrant competition in the native labor markets may contribute to the high poverty among immigrants, and more importantly, it may help to inform and enlighten policies aimed at redu...


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...ws, and the Local Labor Market Impacts of Higher Immigration,” Journal of Labor Economics Volume 19, January 2001, p. 27-49.
Card, David. “Immigration and Inequality,” The American Economic Review. May 2009, pp. 5-18.
Card, David, and John DiNardo, “Do Immigrant Inflows Lead to Native Outflows?” The American Economic Review, May 2000, p. 357-363.
Card, David, and Ethan Lewis. “The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts.” Mexican Immigration to the United States. Chicago: University of Chicago Press, 2007.
Lewis, Ethan, “How Do Local Labor Markets in the U.S. Adjust to Immigration?” Federal Reserve Bank of Philadelphia, November 2004.
Peri, Giovanni, and Chad Sparber, “Task Specialization, Comparative Advantages, and the Effects of Immigration on Wages,” American Economic Journal: Applied Economics July 2009, pp. 120-158.




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