articleJournal of the European Economic AssociationOct 25, 2011Closed access

Rethinking the Effect of Immigration on Wages

GIGianmarco I.P. OttavianoGPGiovanni Peri

Bocconi University · London School of Economics and Political Science · +1 more institution

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Abstract

Abstract This paper calculates the effects of immigration on the wages of native US workers of various skill levels in two steps. In the first step we use labor demand functions to estimate the elasticity of substitution across different groups of workers. Second, we use the underlying production structure and the estimated elasticities to calculate the total wage effects of immigration in the long run. We emphasize that a production function framework is needed to combine own-group effects with cross-group effects in order to obtain the total wage effects for each native group. In order to obtain a parsimonious representation of elasticities that can be estimated with available data, we adopt alternative…

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Topics & keywords

Topics
Keywords
  • Immigration
  • Economics
  • Elasticity of substitution
  • Wage
  • Imperfect
  • Production (economics)
  • Labour economics
  • Order (exchange)
UN Sustainable Development Goals
  • Decent work and economic growth
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