[Editor's Note: This is the third and most up-to-date edition of the compendium. It was originally published in 2019 and then revised in 2020.]
Is there a scholarly consensus that immigration benefits all Americans? Listening to advocates and their allied media, one might assume so. Vox once ran this headline: “There's no evidence that immigrants hurt any American workers.” A writer for Forbes claimed that immigration restrictionists “are on the wrong side of history and the wrong side of social science”. Reason’s Shikha Dalmia has claimed that George Borjas is “literally the only economist of any repute who questions the economic benefits of immigration”.
The purpose of this compendium is to dispel such self-serving myths. The truth is that the costs and benefits of immigration are routinely measured, weighed, and debated in academic journals. No fair reading of the literature could conclude that immigration has only benefits — or only costs, for that matter. A 2016 review by the National Academies of Sciences, Engineering, and Medicine demonstrated the mixed effects of immigration, as have dozens of studies appearing since that time. This compendium uses the National Academies as a starting point, then summarizes a sample of subsequently published papers that find costs associated with immigration. These papers address the labor market impact of immigration as well as broader effects.
The National Academies’ 2016 Review
Chapters 4 and 5 of the National Academies’ book-length report review the theoretical and empirical research on how immigration affects wages and employment. Anyone who takes the time to read this material will understand that immigration is costly to certain groups of Americans. For example, Table 5-2 from the report lists several major studies measuring immigration’s impact on wages. Notice the negative values in the “Wage Effect” column:
Unfortunately, not everyone has done the reading. The economist-activist Esther Duflo once told a whopper about the National Academies’ report. According to her, the report “summarized maybe hundreds of studies, and they all come to the conclusion that the effect of low-skilled migration on low-skilled wages is zero.” It is these types of assertions, thoroughly unmoored from reality, that fuel the impression of consensus about immigration’s benefits.
Since the National Academies’ report was published in 2016, academics have continued to produce papers finding costs associated with immigration. A curated list of these recent papers is provided below. Please note that the authors are mainstream academics writing for mainstream outlets. Harvard’s George Borjas, who was alleged to be “the only economist” to publish these types of studies, clearly has a lot of company. Like Borjas, these authors usually stress that they have found both costs and benefits. One-sided claims about immigration are rarely true.
In each of the following paper summaries, I focus on the immigration aspects of the paper, draw out policy implications, and link to related CIS research whenever helpful.
Wage and Employment Effects
- Anthony Edo, “The Impact of Immigration on the Labor Market”, Journal of Economic Surveys, Vol. 33, No. 3, July 2019.
This review paper is similar in content to the National Academies’ chapters, but it takes a more international perspective. After considering over 50 studies of immigration in developed countries, the author concludes that “immigration can create winners and losers among the native-born workers.” Because low-skill immigration tends to make low-skill natives the “losers” and high-skill natives the “winners”, rising inequality is a natural consequence. This conclusion stands in stark contrast to the advocates’ position that “there is no evidence that immigrants hurt any American workers.” While some Americans gain from immigration, others certainly do lose.
- Joseph Price, Christian vom Lehn, and Riley Wilson, “The Winners and Losers of Immigration: Evidence from Linked Historical Data”, NBER Working Paper No. 27156, May 2020.
This paper acknowledges the winner-loser framework right in its title. The authors use genealogical data to track millions of men between decennial censuses in the early 20th century. Following these individuals allows the authors to improve upon past research that focused only on community-level impacts of immigration. They find that older and higher-skilled workers were the “winners” — their incomes tended to go up when immigrants entered their local labor market. By contrast, younger and less-skilled workers were the “losers” — they were more likely to move away and suffer income losses as a result of immigration.
In the modern-day context, CIS has emphasized that immigration tends to have strong disemployment effects on the youngest and least-skilled Americans of all: teenagers.
- David A. Jaeger, Joakim Ruist, and Jan Stuhler, “Shift-Share Instruments and the Impact of Immigration”, NBER Working Paper No. 24285, February 2018.
Several studies try to isolate the impact of immigration on wages by comparing cities with different levels of immigration. The problem is that immigrants do not choose destination cities randomly. If they choose cities that have rising wages, the negative impact of immigration may be obscured.
This paper shows that a common “instrumental variables” technique to deal with that problem still unintentionally captures more than just the initial impact of immigration. When a local area experiences an influx of immigrants, the wage goes down for a time, but then it rises back toward equilibrium as more businesses come in or other workers leave. Since immigrants tend to go to the same places year after year, the instrumental-variables technique captures both the negative short-term wage effect and the positive "catch-up" wage effect from earlier waves of immigrants. As a result, all of the short-term wage effects estimated using this method appear less negative than they really are.
The authors of this paper provide a long list of prior studies that underestimate negative wage effects because of this faulty method. Giovanni Peri, an economist famous for downplaying the negative impact of immigration, has 12 different papers on the list.
- Michael Amior and Alan Manning, “Monopsony and the Wage Effects of Migration”, CEP Discussion Paper No. 1690, May 2021.
In the standard model first developed by George Borjas, immigrants produce small economic gains for natives (an “immigration surplus”) but do so by lowering the wages of competing workers. The model is built on the assumption of “perfect competition” in the labor market, meaning that employers compete for labor until the wage is bid up to equal the workers’ value added. But what happens if the assumption of perfect competition is relaxed?
The authors of this paper argue that various legal and cultural barriers prevent immigrants from moving between jobs as easily as natives do. With less competition among employers to hire workers, immigration could reduce the ability of workers to demand a wage that reflects the full value of their labor. If so, both the surplus and the corresponding wage reductions would increase in magnitude.
- L. Jason Anastasopoulos, George J. Borjas, Gavin G. Cook, and Michael Lachanski, “Job Vacancies and Immigration: Evidence from the Mariel Supply Shock”, Journal of Human Capital, Vol. 15, No. 1, 2021.
It may seem that the Mariel Boatlift (summarized here by CIS) has been studied to death, but this is an innovative paper. It uses a database of historical job listings to establish that job vacancies for low-skill workers in Miami declined after a sudden wave of Cuban refugees arrived in the city in 1980. The implication is that the labor market was not able to immediately adjust to the influx of new workers.
- Christian Dustmann, Uta Schönberg, and Jan Stuhler, “Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment”, Quarterly Journal of Economics, Vol. 132, No. 1., 2017.
Maria Forthun Hoen, “Immigration and the Tower of Babel: Using Language Barriers to Identify Individual Labor Market Effects of Immigration”, Labour Economics, Vol. 65, 2020.
These two papers analyze immigration surges in different countries but come to similar conclusions. In the first paper, a change in commuting policy led to a sudden increase in Czech workers in a border area of Germany. The result was lower wages and employment levels for natives, particularly for those who were older and had less attachment to the labor force. In the second paper, an expansion of the EU labor market caused a surge of immigration to Norway. Wages for young workers fell in the most affected industries, and workers of all ages — especially older ones — experienced declines in employment and increases in disability enrollment.
Although these two papers focus on Europe, they have important implications for U.S. policy. As CIS has argued, the tight labor market in the U.S. in 2019 led employers to recruit from marginalized groups such as high school dropouts and the disabled. Expanding immigration in a tight labor market could short-circuit that employer outreach.
- Michael Amior, “The Contribution of Immigration to Local Labor Market Adjustment”, CEP Discussion Paper No. 1678, September 2021.
Why don’t more Americans leave economically depressed places and move to the parts of the U.S. where more jobs are available? One answer, according to this paper, is that foreign immigration crowds them out. New immigrants tend to settle in high-employment areas, reducing the potential rewards for natives who move there. This phenomenon again illustrates how immigration can limit the opportunities for down-and-out natives to benefit from economic growth.
- Javier Ortega and Gregory Verdugo, “Who Stays and Who Leaves? Immigration and the Selection of Natives Across Locations”, Journal of Economic Geography, Vol. 22, No. 2, March 2022.
George J. Borjas and Anthony Edo, “Gender, Selection into Employment, and the Wage Impact of Immigration”, NBER Working Paper No. 28682, February 2022. Both of these papers show that immigration in France has imposed downward pressure on wages and encouraged natives to move away from high-immigration areas or leave the labor force entirely. Because the natives who exit tend to be less-skilled, the wage impact of immigration on a particular area may be understated if researchers do not take into account the new workforce composition.
- Joan Monras, “Local Adjustment to Immigrant-Driven Labor Supply Shocks”, Journal of Human Capital, Vol. 15, No. 1, 2021.
This is another paper that demonstrates how internal migration can partially disguise longer-term labor market effects of immigration. After the Mariel boatlift initially caused wages to decline in Miami, the labor market returned to equilibrium. However, about half of the adaptation can be ascribed to low-skill workers moving away from (or declining to move to) Miami.
- Bin Xie, “The Effects of Immigration Quotas on Wages, the Great Black Migration, and Industrial Development”, IZA Discussion Paper No. 11214, December 2017.
Just as economists have studied sudden surges in immigration to assess the labor market effects, the results of sudden restrictions on immigration are also instructive. According to this analysis, restrictive immigration laws in the 1920s raised manufacturing wages and drew black migrants from the South into northern factories. This result provides further support for the theory that immigration deters natives from moving into emerging labor markets.
Interestingly, immigration restriction also appears to have slowed the growth of electric-powered assembly lines, which illustrates how the relationship between skills and technology has changed over time. Low-skill workers were once needed to man the assembly lines that displaced skilled artisans. Today, technology generally advances with skilled workers — e.g., computer programmers in Silicon Valley. (See the Brunello et al. paper listed below for more on this point.)
- Ran Abramitzky, Philipp Ager, Leah Boustan, Elior Cohen, and Casper W. Hansen, “The Effect of Immigration Restrictions on Local Labor Markets: Lessons from the 1920s Border Closure”, American Economic Journal: Applied Economics, forthcoming.
This paper also finds that 1920s immigration restrictions benefited rural Americans who migrated into cities to replace lost labor. In contrast, farmers mechanized rather than attempting to recruit new workers.
- Amy Wax and Jason Richwine, “Low-Skill Immigration: A Case for Restriction”, American Affairs, Winter 2017.
The authors combine the “top-down” Census Bureau data on native job losses with “bottom-up” ethnographic research on employer preferences for immigrant labor. They make a strong qualitative case that businesses use immigrants to replace natives in their low-skill workforces.
In 2019, CIS published a follow-up report that focused on Equal Employment Opportunity Commission cases in which employers are accused of favoring immigrant workers over native workers. The details of these cases are consistent with the claim that employers use immigration to depress wages and working conditions.
- Maria Hoen, Simen Markussen, and Knut Roed, “Immigration and Economic Mobility”, Journal of Population Economics, 2021.
Using administrative data from Norway, the authors find that low-skill immigration has reduced social mobility, causing inequality to increase. Interestingly, they connect their findings to the politics of immigration. Opposition to immigration from lower classes in Norway arises not necessarily from “bigotry”, but as a rational response to their weakened economic position.
- David Neumark and Cortnie Shupe, “Declining Teen Employment: Minimum Wages, Other Explanations, and Implications for Human Capital Investment”, Labour Economics, Vol. 59, 2019.
The primary focus of this paper is the minimum wage, but it finds some role for immigration in reducing teen employment. In contrast, the authors find only minimal evidence that teens voluntarily left the labor market because the economic returns to a high school diploma had increased.
- Anthony Edo and Hillel Rapoport, “Minimum Wages and the Labor Market Effects of Immigration”, Labour Economics, Vol. 61, December 2019.
This paper uses state variation in minimum wage laws to show that immigrants tend to lower the wages and employment levels of the natives with whom they compete most directly. Specifically, natives suffer greater wage and employment losses due to low-skill immigration in states with lower minimum wages. Whether increasing the minimum wage would be wise policy is beyond the scope of the paper, but it does show once again that immigrants and natives are — at least to a large extent — substitutes in the labor market.
- John Bound, Guarav Khanna, and Nicolas Morales, “Understanding the Economic Impact of the H-1B Program on the U.S”, in High-Skilled Migration to the United States and Its Economic Consequences, Eds. Gordon H. Hanson, William R. Kerr, and Sarah Turner, University of Chicago Press, 2018.
General equilibrium models can be highly sensitive to assumptions. It sometimes seems that one can build a model to prove virtually any proposition. In this case, however, the model confirms basic economic theory: High-skill immigration in the 1990s lowered the wage for competing native workers but reduced consumer prices and increased corporate profits, again illustrating the trade-offs inherent to immigration policy. Consumers and corporations win, while some workers lose.
- Giorgio Brunello, Elisabetta Lodigiani, and Lorenzo Rocco, “Does Low-skilled Immigration Increase Profits? Evidence from Italian Local Labour Markets”, Regional Science and Urban Economics, Vol. 85, November 2020.
Though its results are likely underestimated due to use of the instrumental-variables technique discussed in the Jaeger et al. paper listed above, this paper finds the usual result that low-skill immigration reduces wages and increases profits in affected industries. The authors speculate that low-skill immigration has retarded Italy’s transition to a more high-tech economy.
There is an interesting parallel here to U.S. agriculture, where CIS research has found that immigration delays mechanization of the harvest. (Also see the Abramitzky et al. paper above.)
- Simone Bertoli and Steven Stillman, “All That Glitters Is Not Gold: Wages and Education for U.S. Immigrants”, Labour Economics, Vol. 61, December 2019.
Education generally correlates with earnings, but the relationship is weaker among immigrants. This paper finds that when a highly-educated immigrant is selected at random, 25 percent of the time he or she will have lower earnings than a less-educated immigrant who is also selected at random. The corresponding figure for high- versus less-educated natives is about 14 percent. “Conferring a pivotal role to education in the selection of migrants might fail to induce a substantial increase in their average quality, and it might even potentially backfire,” the authors warn. For one thing, these allegedly “skilled” workers could end up competing with less-educated natives.
The findings are consistent with several reports published by CIS. First, despite their faster educational gains, recent immigrants have not improved relative to natives on measures of income, poverty, and welfare consumption. Second, college-educated immigrants are more likely than college-educated natives to hold low-skill jobs, especially when the immigrants are from Latin America. Third, immigrants with foreign college or advanced degrees score lower on tests of English literacy, numeracy, and computer operations compared to natives with the same level of education. Finally, the value of foreign degrees varies substantially by source country.
Cultural and Political Effects
- Kathleen Kürschner Rauck and Michael Kvasnicka, “The 2015 European Refugee Crisis and Residential Housing Rents in Germany”, IZA Discussion Paper No. 12047, December 2018.
Kathleen Kürschner Rauck, “Not in My Backyard! The 2015 Refugee Crisis in Germany”, Working Paper on Finance 2020/04, September 2020.
These companion papers fall at the intersection of economics and culture. They find that the influx of Syrian refugees to Germany lowered apartment rents and the prices of single-family homes in areas where the refugees were most concentrated, despite the sheer increase in people needing housing. The reason is that native Germans did not wish to live near large numbers of refugees. Immigration changes host countries in a variety of ways, and these papers offer a rare quantitative look at how natives sometimes avoid the areas most affected.
- Umair Ali, “Native Flight Responses to Immigration: Evidence from K-12 School Enrollments”, EdWorkingPaper No. 22-579, May 2022.
In the U.S., a growing immigrant population in a metropolitan area increases the likelihood that white and black natives will exit the public schools. The effect is especially strong among white students, who tend to move over to private schools. By contrast, Hispanic and Asian students do not leave the public schools. The author of this paper suggests that “homophily” — the desire for cultural familiarity — can explain why immigration appears to be so disruptive to the student body. Lower levels of immigration would of course mitigate these cultural disruptions, as CIS has emphasized.
- Courtney Brell, Christian Dustmann, and Ian Preston, “The Labor Market Integration of Refugee Migrants in High-Income Countries”, Journal of Economic Perspectives, Vol. 34, No. 1, Winter 2020.
Resettling refugees may be a humanitarian good, but the argument that refugees are somehow an economic boon to their host nations is dubious. This paper reviews the evidence that refugees struggle to integrate into the economies of high-income host nations. In the U.S. specifically, refugees perform unusually well in finding jobs. However, in line with their counterparts in other rich nations, U.S. refugees earn low wages even after 10 years of residency.
CIS estimated in 2020 that the average new refugee in the U.S. imposes a fiscal cost of about $60,000 in lifetime net present value. The corresponding cost for refugees who enter as adults is $133,000.
- Zachary Ward, “The Not-So-Hot Melting Pot: The Persistence of Outcomes for Descendants of the Age of Mass Migration”, American Economic Journal: Applied Economics, Vol. 12, No. 4, October 2020.
The idea that Great Wave immigrants of varied nationalities disappeared into a “melting pot” is an exaggeration. In 1880, large differences in earnings (as measured by occupational status) existed among immigrants of different nationalities. By 1940, the grandchildren of those immigrants still exhibited about half of the initial differences. Although this paper focuses primarily on Great Wave immigrants, the author warns that “there are many reasons to expect the persistence of ethnic gaps to be stronger for more recent times.”
Indeed, a CIS report finds that the grandchildren of Mexican immigrants still lag behind white Americans in education and earnings. Immigration advocates who brush aside concerns about assimilation need to address this worrisome evidence.
- Dafeng Xu, “The Effects of Immigration Restriction Laws on Immigrant Segregation in the Early Twentieth Century U.S.”, Journal of Comparative Politics, Vol. 48, No. 2, 2020.
The ethnic enclaves in which Great Wave immigrants gathered eventually withered away, leading to less residential segregation. According to this paper, the process was aided by immigration restriction in the 1920s. The paper finds that residential segregation decreased more rapidly among the immigrant groups that were most restricted, such as Italians and Poles. The effect occurred mainly by denying ethnic enclaves “reinforcements” in the form of new immigrants, although the author also finds some evidence that return migration became more likely among enclave residents compared to non-enclave residents. The results suggest that, to the extent that the “melting pot” operates, it can be strengthened by limiting immigration.
- Deniz Gevrek, Cahit Guven, and Z. Eylem Gevrek, “The Relationship Between Early-life Conditions in the Home Country and Adult Outcomes Among Child Immigrants in the United States”, Economics & Human Biology, Vol. 45, 2022.
Immigrants who arrive in the U.S. as children generally have the benefit of growing up with institutions that help them integrate into their new society. However, this paper finds that the infant mortality rate in the children’s sending country is negatively associated with their academic performance in U.S. middle schools and with their subsequent labor market outcomes as adults. The authors argue that this association is causal. However, even if the relationship is due to other factors, it is still a sobering reminder that long-term exposure to U.S. institutions (including costly social programs) cannot always overcome pre-existing differences. CIS has reflected on this problem in several papers, including an analysis of academic tests that include the scores of U.S. immigrants and their children.
- Paola Giuliano and Marco Tabellini, “The Seeds of Ideology: Historical Immigration and Political Preferences in the United States”, NBER Working Paper No. 27238, May 2020.
While previous papers analyzed the socioeconomic assimilation of Great Wave immigrants, this one focuses on political assimilation. The authors find that preferences for redistribution among Americans today are correlated with the historical presence of immigrants. Specifically, immigrants seem to have imported the political ideology of their home countries and then spread those views to natives. Whether this political effect of immigration is truly “negative” will depend on one’s own political views, but remember that any significant political shift, to the left or to the right, usually involves social disruption.
Crime and Health Effects
- Alexander Billy and Michael Packard, “Crime and the Mariel Boatlift”, Working Paper, October 2020.
Research on the Mariel Boatlift usually focuses on the labor market impact. (See Anastasopoulos et al. above.) This paper investigates the impact on crime. Compared to similar cities, Miami experienced a 41 percent increase in the murder rate, a 70 percent increase in the rate of robberies, and at least a 25 percent increase in the rate of property crimes after the boatlift. The authors caution, however, that extrapolating to ordinary immigrants would be unjustified, since Fidel Castro added inmates of prisons and mental hospitals to the ranks of the Marielitos.
In a 2009 report, CIS discussed the challenges of measuring immigrant crime. A follow-up piece in 2015 summarized recent developments, with particular emphasis on choosing an appropriate baseline for comparison.
- Brandyn F. Churchill, Andrew Dickinson, Taylor Mackay, and Joseph J. Sabia, “The Effect of E-Verify Laws on Crime”, Industrial and Labor Relations Review, forthcoming.
States that mandated E-Verify saw a 7 percent decline in property crime committed by working-age Hispanics. The authors believe that the decrease in labor market competition with illegal aliens steered Hispanic citizens toward work and away from crime.
- Mevlude Akbulut-Yuksel, Naci H. Mocan, Semih Tumen, and Belgi Turan, “The Crime Effect of Refugees”, NBER Working Paper No. 30070, May 2022.
The influx of millions of Syrian refugees into Turkey caused crime to rise in the most affected provinces, although this study cannot distinguish between Syrian and Turkish offenders. The authors theorize that economic competition is one of the drivers of conflict between the two groups.
Although massive refugee flows are more associated with Europe, the U.S. may eventually confront similar issues. For example, when the Biden administration began accepting tens of thousands of Afghan refugees last year, CIS warned that vetting was woefully insufficient. An additional CIS report discussed evidence that crime rates among Afghan refugees in Europe are troublingly high. Whether the U.S. will experience similar refugee crime problems remains to be seen.
- Philipp Ager, James J. Feigenbaum, Casper Worm Hansen, and Hui Ren Tan, “How The Other Half Died: Immigration and Mortality in US Cities”, NBER Working Paper 27480, July 2020.
Analyzing the aftermath of the 1924 immigration restriction, the authors develop a measure of “missing immigrants”, meaning the difference between the actual number of immigrants post-1924 and the number expected based on pre-1924 trend lines. Cities with more missing immigrants saw greater declines in infectious-disease deaths. The authors argue that reduced crowding led to improved sanitation in cities, boosting the health of immigrants and natives alike.
The link between overcrowding and disease became highly salient during the Covid-19 pandemic. As CIS has shown, household overcrowding contributes to the spread of respiratory diseases, including Covid-19, and modern immigration has added significantly to the overcrowding problem in the U.S. — just as it did prior to 1924.
- Melike Dedeoğlu, Emrah Koçak, and Zübeyde Şentürk Uucak, “The Impact of Immigration on Human Capital and Carbon Dioxide Emissions in the USA: An Empirical Investigation”, Air Quality, Atmosphere & Health, Vol. 14, 2021.
This paper shows that immigration to the U.S. increases the country’s greenhouse gas emissions. While allowing that mitigating climate change requires a multi-faceted approach, the authors argue that policymakers should not ignore the role of immigration when devising environmental policies. Previous CIS research has made largely the same point.