Do Immigrants Hurt Employment for Americans?

Via Ezra Klein, the National Bureau of Economic Research released a study this month on whether immigration hurts the economy and takes away jobs from American-born workers. In the study, which also looked at the impact of outsourcing, economists Gianmarco I.P. Ottaviano, Giovanni Peri and Greg C. Wright determined that immigration can actually boost American employment and push native-born workers into higher-paying positions that require more communication.

From the study:

How many “American jobs” have U.S.-born workers lost due to immigration and offshoring? Or, alternatively, is it possible that immigration and offshoring, by promoting cost-savings and enhanced efficiency in firms, have spurred the creation of jobs for U.S. natives? [...] The model predicts that while cheaper offshoring reduces the share of natives among less skilled workers, cheaper immigration does not, but rather reduces the share of offshored jobs instead. Moreover, since both phenomena have a positive “cost-savings” effect they may leave unaffected, or even increase, total native employment of less skilled workers. Our model also predicts that offshoring will push natives toward jobs that are more intensive in communication-interactive skills and away from those that are manual and routine intensive. We test the predictions of the model on data for 58 U.S. manufacturing industries over the period 2000-2007 and find evidence in favor of a positive productivity effect such that immigration has a positive net effect on native employment while offshoring has no effect on it. We also find some evidence that offshoring has pushed natives toward more communication-intensive tasks while it has pushed immigrants away from them.

Klein has made this point before, as have a number of other economists. A paper released in August by the Federal Reserve Bank of San Francisco corroborates this point, finding immigration has no “significant” effect on the number of jobs available to Americans. Of course, these results don’t mean immigration causes positive economic benefits for everyone: Most experts acknowledge that American workers in low-skilled jobs can be negatively impacted by immigrants who are willing to work for lower pay, while illegal immigration allows for exploitation and less power for workers in certain sectors.

The key to this type of growth, according to economists, would be creating a legal immigration system that better responds to the needs of the economy. The current visa system is largely based on family reunification, allotting only 15 percent of visas for employment-based purposes. In certain industries, such as agriculture, employers argue there are simply not enough visas available to meet the need for workers. AgJOBS, a bill that would allow two million farm workers to work in the U.S. and eventually become legal residents, would relieve this problem somewhat, but so far has little Republican support.