Authors: George J. Borjas
May 1, 2004
John F. Kennedy School of Government, Harvard University

President Bush and some members of Congress have proposed legalizing illegal aliens and substantially increasing legal immigration. Economic theory predicts that increasing the supply of labor in this way will reduce earnings for natives in competition with immigrants. This study examines the economic impact of increases in the number of immigrant workers by their education level and experience in the work force, using Census data from 1960 through 2000. Statistical analysis shows that when immigration increases the supply of workers in a skill category, the earnings of native-born workers in that same category fall. The negative effect will occur regardless of whether the immigrant workers are legal or illegal, temporary or permanent. Any sizable increase in the number of immigrants will inevitably lower wages for some American workers. Conversely, reducing the supply of labor by strict immigration enforcement and reduced legal immigration would increase the earnings of native workers.

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