Impact of Mexican Immigration on United States' Native Workers

Mallory Bedell and Elizabeth Williams

Abstract

Previous studies by Borjas (2007), Ottaviano and Peri (2008), and Card (1990) focus on the impact Mexican immigration has on the U.S. labor market. Specifically, whether immigration has a direct effect on natives’ wages and unemployment. We study low-skilled males in the labor force between the ages of 16-64, while also controlling for gender, familial status, and race. Control variables are measured at the city-level, in hopes of providing us with more accurate estimates that may be overlooked at the national level (Levine 2010). Using data from IPUMS USA at the metropolitan level, we find that on average, Mexican immigration has no significant impact on the U.S. unemployment rate. In regard to native wages, however, we find a small statistically significant negative impact. Our results are used to analyze the substitutability and complementary relationships between immigrants and native workers. The downward pressure on wages may result in the potential substitutability between low-skilled male natives and low-skilled male Mexican immigrants. An influx of immigrants may result in an increase in labor supply, which will decrease the overall wages in the labor market for specific low-skilled occupations.