One of the top researchers on the effects of immigration on native workers’ wages has produced a new study that finds that an increase in low-skilled immigration pushes native workers into more complex jobs, raising their wages.
The question of how low-wage native workers are affected by immigration is hotly contested among academics. Giovanni Peri, an economist at the University of California, Davis, known for immigration research, examined the effects of a mass migration of Bosnian, Somalian, and Iraqi refugees to Denmark over 1991-2008. Along with the Danish researcher Mette Foged, Peri discovered that the result of the influx of low-skilled migrants was that Danish workers, over time, were pushed into new, more complex jobs, an effected more pronounced in cities with higher levels of immigrants. For both high-skilled and low-skilled Danes, that process resulted over time in higher wages.
Because of the availability of individual-level data for Danish workers, Peri and Foged were able to address one of the main criticisms leveled at previous studies showing that increased immigration aids low-skilled native workers. George Borjas, a Harvard professor and skeptic of the benefits of immigration for the lower class, has suggested that analysis of immigration’s impact on a town or region might be flawed because native workers might leave the area of interest following an influx of immigrants. By collecting data on individual workers wherever they might go, Peri and Foged get around the problem of spillover effects to other regions.
The result they found is that native Danes saw an increase in job mobility and geographic mobility following the mass movement of migrants to their country. There was other good news for native workers: they didn’t see an increase an unemployment, and some went back for additional schooling that they might otherwise not have had.
The study, released Monday morning by the National Bureau of Economic Research, has obvious relevance for the immigration debate taking place on Capitol Hill. The study’s authors note that the level of low-skilled immigration to Denmark in the 1990s and 2000s was comparable to that of other countries known for mass immigration. The cumulative increase of immigrants as percentage of employment was 3.1 percentage points, according to Peri and Foged, compared to figures of 3.5 percentage points for Canada and 3.8 percentage points for the U.S. over the same time period.