Does Immigration Affect Wages? Evidence from Occupational Data

Madeline Zavodny, Federal Reserve Bank of Atlanta
Pia Orrenius, Federal Reserve Bank of Dallas

Previous research has reached mixed conclusions about whether higher levels of immigration reduce the wages of natives. This paper reexamines this question using data from the Current Population Survey and the Immigration and Naturalization Service and focuses on differential effects by skill level. Using occupation as a proxy for skill, we find that an increase in the fraction of workers in an occupation who are foreign born lowers the wages of unskilled natives--particularly after controlling for endogeneity--but does not have a negative effect among skilled natives.