Labor Market Competition and the Assimilation of Immigrants

Arbeitspapier

In this paper, we show that the wage assimilation of immigrants is the result of the intricate interplay between individual skill accumulation and dynamic equilibrium effects in the labor market. When immigrants and natives are imperfect substitutes, increasing immigrant inflows widen the wage gap between them. Using a simple production function framework, we show that this labor market competition channel can explain about one quarter of the large increase in the average immigrant-native wage gap in the United States between the 1960s and 1990s arrival cohorts. Once competition effects and compositional changes in education and region of origin are accounted for, we find that the unobservable skills of newly arriving immigrants increased over time rather than decreased as traditionally argued in the literature. We corroborate this finding by documenting closely matching patterns for immigrants' English language profficiency.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9231

Classification and Topics

• Classification: Wirtschaft ; Labor Force and Employment, Size, and Structure ; Time Allocation and Labor Supply ; Wage Level and Structure; Wage Differentials ; Geographic Labor Mobility; Immigrant Workers
• Subject: immigrant assimilation ; labor market competition ; cohort sizes ; imperfect substitution ; general and specific skills

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Albert, Christoph ; Glitz, Albrecht ; Llull, Joan
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/245412
• Last update: 10.03.2025, 11:42 AM CET