Skill Differences and the Effect of Immigrants on the Wages of Natives

Abstract. This paper examines the effects of changes in the supply of immigrant labor on the wages of natives in the 1980s. Estimates are presented indicating that immigrants and natives are nearly perfect substitutes within broad skill categories. This result is then used to calculate the effects of the large influx of immigrants to the U.S. labor market. The calculations presented suggest that immigration depressed the wages of native dropouts by as much as 3 percent and can account for up to 24 percent of the increase in the college – high school wage differential in the 1980s