Journal of Population Economics

, Volume 7, Issue 2, pp 157–175 | Cite as

Labor market effects of immigration in the United States and Europe

Substitution vs. complementarity
  • Ira N. Gang
  • Francisco L. Rivera-Batiz
Article

Abstract

This paper examines the impact of immigrants on the income of various groups of resident workers in the United States and Europe. Our approach features the use of a production technology incorporating education, experience, and unskilled labor as inputs. This contrasts with the assumption used in earlier studies that native-born and immigrant labor are distinct inputs into production. We find that in both United States and European production, education, unskilled labor and experience are complementary inputs. Based on these results, simulations of the impact of immigration on residents are carried out. The absolute magnitude of these effects is found to be very small.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Altonji J, Card D (1991) The effects of immigration on the labor market outcomes of less-skilled natives. In: Abowd JM, Freeman RB (eds) Immigration, trade, and the labor market. University of Chicago Press, Chicago, pp. 201–234Google Scholar
  2. Baldwin-Grossman J (1982) The substitutability of natives and immigrants in production. Rev Econ Statist 64:596–603Google Scholar
  3. Baldwin-Grossman J (1984) Illegal immigrants and domestic employment. Indust Labor Relat Rev 37:240–251Google Scholar
  4. Bean FD, Lowell BL, Taylor LJ (1988) Undocumented Mexican immigrants and the earnings of other workers in the United States. Demography 25:35–49Google Scholar
  5. Borjas GJ (1983) The substitutability of black, hispanic and white labor. Econ Inquiry 21:93–106Google Scholar
  6. Borjas GJ (1986) The demographic determinants of the demand for black labor. In: Freeman RB, Holzer H (eds) The black youth employment crisis. University of Chicago Press, Chicago, pp. 191–230Google Scholar
  7. Borjas GJ (1993) Immigrant skills and ethnic spillovers. CEPR workshop: The Economics of international migration: econometric evidence. Konstanz, Germany, February 26/27Google Scholar
  8. Borjas GJ, Freeman RB, Katz LF (1992) On the labor market effects of immigration and trade. In: Borjas GJ, Freeman RB (eds) Immigration and the workforce: economic consequences for the United States and source areas. University of Chicago Press, Chicago, pp. 213–244Google Scholar
  9. Burda M, Wyplosz C (1991 a) Human capital, investment and migration in an integrated Europe. CEPR Discussion Paper No. 614Google Scholar
  10. Burda M, Wyplosz C (1991 b) Labour mobility and German integration: some vignettes. CEPR Discussion Paper No. 615Google Scholar
  11. Burgess DF (1975) Duality theory and pitfalls in the specification of technologies. J Economet 3:105–121Google Scholar
  12. Chiswick BR (1982) The impact of immigration on the level and distribution of economic well-being. In: Chiswick BR (ed) The gateway: US immigration issues and policies. American Enterprise Institute, Washington, DC, pp. 289–313Google Scholar
  13. Christensen L, Jorgenson D, Lau L (1973) Transcendental logarithmic production frontiers. Rev Econ Statist 55:28–45Google Scholar
  14. DeFreitas G, Marshall A (1983) Immigration and wage growth in US manufacturing in the 1970s. AEA/IRRA Meetings, San Francisco CAGoogle Scholar
  15. DeNew JP, Zimmermann KF (1994) Native wage impacts of foreign labor: a random effects panel analysis. J Popul Econ 7:177–192Google Scholar
  16. Enchautequi M (1993) The effect of immigration on the wages and employment of black males. Urban Institute Working Paper 23Google Scholar
  17. Espenshade TJ, Goodis TA (1988) Are immigrants and native workers substitutes or complements in production? Lessons from Southern California and the American Southwest. US Dept of Labor Conf on Immigration, Sept 15–16Google Scholar
  18. Filer RK (1992) The effects of immigrant arrivals on migratory patterns of native workers. In: Borjas GJ, Freeman RB (eds) Immigration and the work force: economic consequences for the United States and source area. University of Chicago Press, Chicago, pp. 245–269Google Scholar
  19. Gang IN, Rivera-Batiz F (1993) Labor market effects of immigration in the United States and Europe: substitution vs. complementarity. Rutgers University Department of Economics Working Paper No. 93-18Google Scholar
  20. Gordon I (1989) The role of international migration in the changing European labour market. In: Gordon I, Thirlwall AP (eds) European factor mobility: trends and consequences. St. Martin's, New York, pp. 13–29Google Scholar
  21. Greene WH (1990) Econometric analysis. Macmillan, New YorkGoogle Scholar
  22. Greene WH (1992) Limdep: user's manual and reference guide, version 6.0. Econometric Software, Bellport NYGoogle Scholar
  23. Hamermesh DS (1986) The demand for labor in the long run. In: Ashenfelter O, Layard R (eds) Handbook of labor economics, Vol. 1. North-Holland, Amsterdam, pp. 430–471Google Scholar
  24. Hamermesh DS (1993) Labor demand. Princeton University Press, Princeton, NJGoogle Scholar
  25. Hamermesh DS, Rees A (1993) The economics of work and pay, 5th edn. Harper Collins, New YorkGoogle Scholar
  26. Heckman JJ, Sedlacek G (1985) Heterogeneity, aggregation, and market wage functions: an empirical model of self-selection in the labor market. J Polit Econ 93:1077–1125Google Scholar
  27. Krueger A, Pischke JS (1992) A comparative analysis of East and West German labor markets: before and after unification. NBERGoogle Scholar
  28. LaLonde RJ, Topel RH (1991) Labor market adjustments to increased immigration. In: Abowd JM, Freeman RB (eds) Immigration, trade, and the labor market. University of Chicago Press, Chicago, pp. 167–200Google Scholar
  29. Layard R, Blanchard O, Dornbusch R, Krugman P (1992) East-west migration: the alternatives. MIT Press, Cambridge, MAGoogle Scholar
  30. Licht G, Steiner V (1992) Assimilation, labour market experience, and earnings profiles of temporary and permanent immigrant workers in Germany. Conference on mass migration in Europe: implications for east and west, Vienna, March 5–7Google Scholar
  31. Orcutt-Duleep H, Regets MC (1993) Country of origin and immigrant earnings. Middlebury College conference on immigration, Middlebury, Vermont, AprilGoogle Scholar
  32. Polachek S, Siebert WS (1993) The economics of earnings. Cambridge University Press, CambridgeGoogle Scholar
  33. Rabier JR, Riffault H, Inglehart R (1988) Euro-barometer 25. ICPSR ed., Inter-University Consortium for Political and Social Research, Ann Arbor MIGoogle Scholar
  34. Rabier JR, Riffault H, Inglehart R (1989a) Euro-barometer 26. ICPSR (ed) ICPSR, Ann Arbor MIGoogle Scholar
  35. Rabier JR, Riffault H, Inglehart R (1989b) Euro-barometer 27. ICPSR (ed) ICPSR, Ann Arbor MIGoogle Scholar
  36. Reif K, Melich A (1990) Euro-barometer 29. ICPSR (ed) ICPSR, Ann Arbor MIGoogle Scholar
  37. Reif K, Melich A (1991) Euro-barometer 30. ICPSR (ed) ICPSR, Ann Arbor MIGoogle Scholar
  38. Reif K, Melich A (1992) Euro-barometer 31. ICPSR (ed) ICPSR, Ann Arbor MIGoogle Scholar
  39. nRivera-Batiz F (1981) The effects of immigration in a distorted two-sector economy. Econ Inquiry 19:626–639Google Scholar
  40. Rivera-Batiz F, Sechzer SL (1991) Substitution and complementarity between immigrant and native labor in the United States. In: Rivera-Batiz FL, Sechzer SL, Gang IN (eds) US immigration policy reform in the 1980s. Praeger, Westport CT, pp. 89–116Google Scholar
  41. Rivera-Batiz FL, Sechzer SL, Gang IN (eds) (1991) US immigration policy reform in the 1980s. Praeger, Westport, CTGoogle Scholar
  42. Rosen S (1974) Hedonic prices and implicit prices: product differentiation in perfect competition. J Polit Econ 82:34–55Google Scholar
  43. Rosen S (1983) A note on aggregation of skills and labor quality: linear synthesis of skill distribution. J Hum Resources 18:425–431Google Scholar
  44. SHAZAM (1993) User's reference manual, version 7.0. McGraw-Hill, New YorkGoogle Scholar
  45. Straubhaar T, Zimmermann KF (1993) Towards a European migration policy. Popul Res Policy Rev (in press)Google Scholar
  46. Taylor LJ, Bean FD, Rebitzer JB, Gonzalez-Baker S, Lindsay Lowell B (1988) Mexican immigrants and the wages and unemployment experience of native workers. Working Paper PRIP-UI-1, The Urban InstituteGoogle Scholar
  47. Tolbert CM (1987) Labor market areas for the United States. Agricultural and Rural Economic Division, Economic Research Service, US Dept of AgricultureGoogle Scholar

Copyright information

© Springer-Verlag 1994

Authors and Affiliations

  • Ira N. Gang
    • 1
  • Francisco L. Rivera-Batiz
    • 2
  1. 1.Department of EconomicsRutgers UniversityNew BrunswickUSA
  2. 2.Department of EconomicsColumbia UniversityNew YorkUSA

Personalised recommendations