Immigration and Wages: What Economists Find When They Run The Numbers

THE QUESTION

"Immigration is driving down wages for American workers." It's one of the most common lines in the immigration debate, and one of the least evidenced, on either side. What does the actual peer-reviewed research say?

WHAT WE KNOW

Most recent academic research finds immigration has, at most, a small effect on native-born wages overall, and often a modestly positive one. A meta-analysis of 88 studies from 1985 to 2023 found major variation by methodology, but the more rigorous, bias-corrected approaches consistently find smaller effects than older methods. Studies comparing entire national skill groups have historically found bigger negative effects for less-educated workers than studies comparing local labor markets, but newer work reconciling the two tends to land near zero or modestly positive, once economists account for the fact that immigrants are also consumers, generating additional local demand.

Recent NBER research covering 2019–2022 found small positive wage effects for non-college native workers and no meaningful employment crowding-out. A separate large-scale study of 2000–2019 found immigrant population increases didn't correspond with native worker displacement, they correlated with higher native employment rates. Not everyone agrees: Harvard's George Borjas, using the national-comparison approach, finds more meaningfully negative effects for workers competing directly with new immigrants in the same skill bracket, an influential view, though now a minority position in the broader literature.

WHAT'S MISSING

The real unsettled debate isn't "does immigration help or hurt America", most economists land on small and roughly neutral-to-positive there. The harder question is distributional: do specific workers, in specific local markets, competing directly with a sudden inflow of similarly-skilled labor, feel real short-term pressure even when the national number looks fine? Political debate almost never makes that distinction, it treats "immigration and wages" as one up-or-down question instead of two separate ones.

WHY IT MATTERS

The distinction has real consequences. If the aggregate effect is near zero, broad immigration restriction aimed at "protecting wages" may do little for the specific workers most worried about it, while costing the economy elsewhere. But if certain local markets do see real pressure, blunt national policy is the wrong tool too, targeted labor-market policy might do more.

THE BOTTOM LINE

Established: the dominant strand of current research finds immigration's overall effect on native wages is small, often modestly positive, with no broad evidence of large-scale wage suppression or job displacement in recent data. Contested: whether specific workers in specific local markets feel real, shorter-term wage pressure from rapid immigrant inflows, serious economists still disagree here.

SOURCES & FURTHER READING

•      NBER Working Paper 32389, Caiumi & Peri, "Immigration's Effect on US Wages and Employment Redux"

•      American Immigration Council, "Immigrants Do Not Displace US Workers or Reduce Wages"

•      Cato Institute, "Does Immigration Reduce Wages?" (survey of competing findings, including Borjas)

•      ScienceDirect, meta-analysis of 88 immigration-wage studies (1985–2023)