Immigrant versus Natives? Displacement and Job Creation
The impact of immigration on native workers is driven by two countervailing forces: the degree of substitutability between natives and immigrants, and the increased demand for native workers as immigrants reduce the cost of production and output ex...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/06/19604274/immigrant-versus-natives-displacement-job-creation http://hdl.handle.net/10986/18788 |
| id |
okr-10986-18788 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING AGE CATEGORIES AGE GROUP AGE GROUPS AGRICULTURE AVERAGE WAGE AVERAGE WAGES CITIZENS CITIZENSHIP COBB-DOUGLAS PRODUCTION FUNCTION CONSTANT RETURNS TO SCALE CONSUMERS COUNTRY OF ORIGIN DECLINING INDUSTRIES DEMAND CURVE DEMAND ELASTICITY DEMOGRAPHIC CHANGES DEMOGRAPHIC TRANSITION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPLACEMENT ECONOMIC GROWTH EDUCATIONAL ATTAINMENT ELASTICITY ELASTICITY OF DEMAND ELASTICITY OF LABOR SUPPLY ELASTICITY OF SUBSTITUTION ELASTICITY OF SUPPLY EMPLOYMENT EMPLOYMENT LEVELS EMPLOYMENT STATUS EQUATIONS EXCLUSION RESTRICTION EXPORTS FACTOR PRICES FOREIGN WORKERS FORMAL EDUCATION GDP GDP PER CAPITA GENERAL EQUILIBRIUM HIGH SCHOOL EDUCATION HUMAN CAPITAL HUMAN RESOURCES IMMIGRANT IMMIGRANTS IMMIGRATION IMMIGRATION LEVELS IMMIGRATION POLICIES IMMIGRATION POLICY IMMIGRATION SYSTEM IMPERFECT SUBSTITUTES INCOME INNOVATION INTERNAL MIGRATION INTERNATIONAL CONFERENCE ON MIGRATION INTERNATIONAL MIGRATION INTERNATIONAL MIGRATION REVIEW JOB CREATION JOBS LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR FORCE LABOR MARKET IMPACT LABOR MARKET INFORMATION LABOR MARKET OUTCOMES LABOR MOBILITY LABOR MOVEMENTS LABOR SHARE LABOR SUPPLIES LABOR SUPPLY LABOUR LABOUR FORCE LEGAL IMMIGRATION LEVEL OF EDUCATION LEVELS OF EDUCATION LOCAL LABOR MARKET LOCAL LABOR MARKETS MARGINAL PRODUCT MARITAL STATUS MINIMUM WAGE NATIONAL GOVERNMENTS NATIONAL LEVEL NATIONAL LEVELS NATIVE WORKERS OCCUPATION OCCUPATIONS PERMANENT RESIDENCE POLICY BRIEF POLICY DISCUSSIONS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POTENTIAL MIGRANTS PRIMARY EDUCATION PRIMARY SCHOOL PRIMARY SCHOOL EDUCATION PRODUCT QUALITY PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PROGRESS REAL WAGES RESPECT RETIREMENT SCALE EFFECT SECONDARY EDUCATION SECONDARY SCHOOL SECONDARY SCHOOL EDUCATION SERVICE INDUSTRIES SERVICE SECTORS SKILL GROUP SKILL GROUPS SKILL PREMIUM SKILL PREMIUMS SKILLED LABOR SKILLED WORKERS SPILLOVER SPOUSE SUBSTITUTE SUBSTITUTION EFFECT SUPPLY CURVE SUPPLY ELASTICITY TEMPORARY WORK TOTAL EMPLOYMENT TOTAL WAGE TRANSPORTATION UNEMPLOYED UNITED NATIONS POPULATION DIVISION VOCATIONAL TRAINING WAGE BILL WAGE DATA WAGE DISTRIBUTION WAGE EFFECTS WAGE GAINS WAGE IMPACT WAGE INCREASES WAGE LEVELS WAR WORKER WORKERS WORKFORCE WORKING POPULATION |
| spellingShingle |
ACCOUNTING AGE CATEGORIES AGE GROUP AGE GROUPS AGRICULTURE AVERAGE WAGE AVERAGE WAGES CITIZENS CITIZENSHIP COBB-DOUGLAS PRODUCTION FUNCTION CONSTANT RETURNS TO SCALE CONSUMERS COUNTRY OF ORIGIN DECLINING INDUSTRIES DEMAND CURVE DEMAND ELASTICITY DEMOGRAPHIC CHANGES DEMOGRAPHIC TRANSITION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPLACEMENT ECONOMIC GROWTH EDUCATIONAL ATTAINMENT ELASTICITY ELASTICITY OF DEMAND ELASTICITY OF LABOR SUPPLY ELASTICITY OF SUBSTITUTION ELASTICITY OF SUPPLY EMPLOYMENT EMPLOYMENT LEVELS EMPLOYMENT STATUS EQUATIONS EXCLUSION RESTRICTION EXPORTS FACTOR PRICES FOREIGN WORKERS FORMAL EDUCATION GDP GDP PER CAPITA GENERAL EQUILIBRIUM HIGH SCHOOL EDUCATION HUMAN CAPITAL HUMAN RESOURCES IMMIGRANT IMMIGRANTS IMMIGRATION IMMIGRATION LEVELS IMMIGRATION POLICIES IMMIGRATION POLICY IMMIGRATION SYSTEM IMPERFECT SUBSTITUTES INCOME INNOVATION INTERNAL MIGRATION INTERNATIONAL CONFERENCE ON MIGRATION INTERNATIONAL MIGRATION INTERNATIONAL MIGRATION REVIEW JOB CREATION JOBS LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR FORCE LABOR MARKET IMPACT LABOR MARKET INFORMATION LABOR MARKET OUTCOMES LABOR MOBILITY LABOR MOVEMENTS LABOR SHARE LABOR SUPPLIES LABOR SUPPLY LABOUR LABOUR FORCE LEGAL IMMIGRATION LEVEL OF EDUCATION LEVELS OF EDUCATION LOCAL LABOR MARKET LOCAL LABOR MARKETS MARGINAL PRODUCT MARITAL STATUS MINIMUM WAGE NATIONAL GOVERNMENTS NATIONAL LEVEL NATIONAL LEVELS NATIVE WORKERS OCCUPATION OCCUPATIONS PERMANENT RESIDENCE POLICY BRIEF POLICY DISCUSSIONS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POTENTIAL MIGRANTS PRIMARY EDUCATION PRIMARY SCHOOL PRIMARY SCHOOL EDUCATION PRODUCT QUALITY PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PROGRESS REAL WAGES RESPECT RETIREMENT SCALE EFFECT SECONDARY EDUCATION SECONDARY SCHOOL SECONDARY SCHOOL EDUCATION SERVICE INDUSTRIES SERVICE SECTORS SKILL GROUP SKILL GROUPS SKILL PREMIUM SKILL PREMIUMS SKILLED LABOR SKILLED WORKERS SPILLOVER SPOUSE SUBSTITUTE SUBSTITUTION EFFECT SUPPLY CURVE SUPPLY ELASTICITY TEMPORARY WORK TOTAL EMPLOYMENT TOTAL WAGE TRANSPORTATION UNEMPLOYED UNITED NATIONS POPULATION DIVISION VOCATIONAL TRAINING WAGE BILL WAGE DATA WAGE DISTRIBUTION WAGE EFFECTS WAGE GAINS WAGE IMPACT WAGE INCREASES WAGE LEVELS WAR WORKER WORKERS WORKFORCE WORKING POPULATION Ozden, Caglar Wagner, Mathis Immigrant versus Natives? Displacement and Job Creation |
| geographic_facet |
Malaysia |
| relation |
Policy Research Working Paper;No. 6900 |
| description |
The impact of immigration on native
workers is driven by two countervailing forces: the degree
of substitutability between natives and immigrants, and the
increased demand for native workers as immigrants reduce the
cost of production and output expands. The literature so far
has focused on the former substitution effect, while
ignoring the latter scale effect. This paper estimates both
of these effects using labor force survey data from Malaysia
(1990-2010), a country uniquely suited for understanding the
impact of low-skilled immigration. The instrumental variable
estimates imply that the elasticity of labor demand (3.4) is
greater than the elasticity of substitution between natives
and immigrants (2.5). On average the scale effect outweighs
the substitution effect. For every ten additional
immigrants, employment of native workers increases by 4.1 in
a local labor market. These large reallocation effects are
accompanied by negligible relative wage changes. At the
national level, a 10 percent increase in immigrants,
equivalent to 1 percent increase in labor force, has a small
positive effect on native wages (0.14 percent). The impact
of immigration is highly heterogeneous for natives with
different levels of education, resulting in substantial
changes in skill premiums and hence inequality. Immigrants
on net displace natives with at most primary education;
while primarily benefiting those with a little more
education, lower secondary or completed secondary education. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Ozden, Caglar Wagner, Mathis |
| author_facet |
Ozden, Caglar Wagner, Mathis |
| author_sort |
Ozden, Caglar |
| title |
Immigrant versus Natives? Displacement and Job Creation |
| title_short |
Immigrant versus Natives? Displacement and Job Creation |
| title_full |
Immigrant versus Natives? Displacement and Job Creation |
| title_fullStr |
Immigrant versus Natives? Displacement and Job Creation |
| title_full_unstemmed |
Immigrant versus Natives? Displacement and Job Creation |
| title_sort |
immigrant versus natives? displacement and job creation |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/06/19604274/immigrant-versus-natives-displacement-job-creation http://hdl.handle.net/10986/18788 |
| _version_ |
1764442682244988928 |
| spelling |
okr-10986-187882021-04-23T14:03:49Z Immigrant versus Natives? Displacement and Job Creation Ozden, Caglar Wagner, Mathis ACCOUNTING AGE CATEGORIES AGE GROUP AGE GROUPS AGRICULTURE AVERAGE WAGE AVERAGE WAGES CITIZENS CITIZENSHIP COBB-DOUGLAS PRODUCTION FUNCTION CONSTANT RETURNS TO SCALE CONSUMERS COUNTRY OF ORIGIN DECLINING INDUSTRIES DEMAND CURVE DEMAND ELASTICITY DEMOGRAPHIC CHANGES DEMOGRAPHIC TRANSITION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPLACEMENT ECONOMIC GROWTH EDUCATIONAL ATTAINMENT ELASTICITY ELASTICITY OF DEMAND ELASTICITY OF LABOR SUPPLY ELASTICITY OF SUBSTITUTION ELASTICITY OF SUPPLY EMPLOYMENT EMPLOYMENT LEVELS EMPLOYMENT STATUS EQUATIONS EXCLUSION RESTRICTION EXPORTS FACTOR PRICES FOREIGN WORKERS FORMAL EDUCATION GDP GDP PER CAPITA GENERAL EQUILIBRIUM HIGH SCHOOL EDUCATION HUMAN CAPITAL HUMAN RESOURCES IMMIGRANT IMMIGRANTS IMMIGRATION IMMIGRATION LEVELS IMMIGRATION POLICIES IMMIGRATION POLICY IMMIGRATION SYSTEM IMPERFECT SUBSTITUTES INCOME INNOVATION INTERNAL MIGRATION INTERNATIONAL CONFERENCE ON MIGRATION INTERNATIONAL MIGRATION INTERNATIONAL MIGRATION REVIEW JOB CREATION JOBS LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR FORCE LABOR MARKET IMPACT LABOR MARKET INFORMATION LABOR MARKET OUTCOMES LABOR MOBILITY LABOR MOVEMENTS LABOR SHARE LABOR SUPPLIES LABOR SUPPLY LABOUR LABOUR FORCE LEGAL IMMIGRATION LEVEL OF EDUCATION LEVELS OF EDUCATION LOCAL LABOR MARKET LOCAL LABOR MARKETS MARGINAL PRODUCT MARITAL STATUS MINIMUM WAGE NATIONAL GOVERNMENTS NATIONAL LEVEL NATIONAL LEVELS NATIVE WORKERS OCCUPATION OCCUPATIONS PERMANENT RESIDENCE POLICY BRIEF POLICY DISCUSSIONS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POTENTIAL MIGRANTS PRIMARY EDUCATION PRIMARY SCHOOL PRIMARY SCHOOL EDUCATION PRODUCT QUALITY PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PROGRESS REAL WAGES RESPECT RETIREMENT SCALE EFFECT SECONDARY EDUCATION SECONDARY SCHOOL SECONDARY SCHOOL EDUCATION SERVICE INDUSTRIES SERVICE SECTORS SKILL GROUP SKILL GROUPS SKILL PREMIUM SKILL PREMIUMS SKILLED LABOR SKILLED WORKERS SPILLOVER SPOUSE SUBSTITUTE SUBSTITUTION EFFECT SUPPLY CURVE SUPPLY ELASTICITY TEMPORARY WORK TOTAL EMPLOYMENT TOTAL WAGE TRANSPORTATION UNEMPLOYED UNITED NATIONS POPULATION DIVISION VOCATIONAL TRAINING WAGE BILL WAGE DATA WAGE DISTRIBUTION WAGE EFFECTS WAGE GAINS WAGE IMPACT WAGE INCREASES WAGE LEVELS WAR WORKER WORKERS WORKFORCE WORKING POPULATION The impact of immigration on native workers is driven by two countervailing forces: the degree of substitutability between natives and immigrants, and the increased demand for native workers as immigrants reduce the cost of production and output expands. The literature so far has focused on the former substitution effect, while ignoring the latter scale effect. This paper estimates both of these effects using labor force survey data from Malaysia (1990-2010), a country uniquely suited for understanding the impact of low-skilled immigration. The instrumental variable estimates imply that the elasticity of labor demand (3.4) is greater than the elasticity of substitution between natives and immigrants (2.5). On average the scale effect outweighs the substitution effect. For every ten additional immigrants, employment of native workers increases by 4.1 in a local labor market. These large reallocation effects are accompanied by negligible relative wage changes. At the national level, a 10 percent increase in immigrants, equivalent to 1 percent increase in labor force, has a small positive effect on native wages (0.14 percent). The impact of immigration is highly heterogeneous for natives with different levels of education, resulting in substantial changes in skill premiums and hence inequality. Immigrants on net displace natives with at most primary education; while primarily benefiting those with a little more education, lower secondary or completed secondary education. 2014-06-26T20:49:33Z 2014-06-26T20:49:33Z 2014-06 http://documents.worldbank.org/curated/en/2014/06/19604274/immigrant-versus-natives-displacement-job-creation http://hdl.handle.net/10986/18788 English en_US Policy Research Working Paper;No. 6900 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Malaysia |