Immigrants create jobs for native-born American workers, according to a new working paper published by the National Bureau of Economic Research. The paper says every immigrant creates 1.2 local jobs for local workers, raises wages for native workers, and attracts native-born workers from elsewhere in the country.
The paper was authored by Gihoon Hong, with Indiana University South Bend, and John McLaren, with the University of Virginia. Hong and McLaren used Census data from 1980-2000 to reach their conclusions.
The arrival of immigrants increases the combined income of a local area, boosting demand for workers in local service jobs, part of the non-traded sector. Hong and McLaren found that these types of local service jobs create more than four-fifths of total income, so immigration to a local area requires more service workers.
“We find that new immigrants tend to raise local wages slightly even in terms of tradeables for jobs in the non-traded sector while they push wages down slightly in the traded sector, and that new immigrants seem to attract native workers into the metropolitan area,” Hong and McLaren wrote. “Overall, it appears that local workers benefit from the arrival of more immigrants.”
Immigration opponents sometimes claim that immigrants crowd out native workers, who lose jobs and move away from immigrant-heavy areas. To the contrary, Hong and McLaren’s research shows native-born American workers are attracted to areas with more immigrants and native-born wages rise as well.
“U.S. workers are actually moving from elsewhere in the country into the city that receives the immigrant inflow,” Hong and McLaren wrote. “Immigration appears to be raising the real wage through increased product diversity in the service industries.”
Although the evidence in the paper is largely supportive of immigration, not every single worker would not benefit. Existing workers in the traded sector, or those who create a good or service that does not need to be locally produced, experienced a slight wage drop from more immigration. These workers would be relatively few, as that sector only creates 17 percent of total income, according to Hong and McLaren.
