JONATHAN COHN AUGUST 6, 2010
Everyone wants money. But is the arrival of immigrants looking to bolster their earnings in the United States making things worse for the people already here? Immigration is estimated to decrease natives' wage between:
zero and nine percent
Research in this field is far from definitive, but despite important contributions made by others, two men dominate the debate over the impact of immigrants on wages--George Borjas, of Harvard, and Berkeley's David Card.
Card's research suggests that immigrants do not lower natives' wages. In his most famous paper, Card used data from the 1980 Mariel boatlift, in which about 100,000 Cubans arrived in Miami in a very short time, to conduct a "natural experiment." Using other cities (which did not receive an influx of Cuban migrants but were otherwise similar to Miami) as a reference point, he found that while unemployment did rise, it was due to a recession in the early 80s, not the Cuban immigrants. And the immigrants did not lower the wages of natives, even the low-skilled workers who they would have been most likely to displace.
Borjas's work, on the other hand, shows the arrival of immigrants hurts the natives' incomes. Borjas believes that there are too many factors that allow a labor market to adjust to an influx of immigrants, rendering Card's approach inadequate. Instead of focusing on just one city, as Card did, Borjas looks at national data. He grouped workers by both experience and education and then used differences in immigration rates among the education-experience groups to estimate the impact of immigration on wages. He found that immigration between 1980 and 2000 lowered wages for the average native by 3.2 percent. The impact, however, was uneven; high-school dropouts saw their wages fall by 8.9 percent while college-educated workers saw their wages drop 4.9 percent. High-school grads and those with only some college fared slightly better.
So who's right? I'm not sure. But both sets of findings raise interesting questions and continue to provoke debate in the academic community. Will Ambrosini, who falls into the Card camp, has written a lot recently about the impact of immigration on wages. It's wonky but well worth reading. And for an easier read about the immigration-wages debate, check out this 2006 classic from Roger Lowenstein.