Immigration: Forging ahead and falling behind

PUBLIC discussion of immigration often circles round to the idea that it is bad for low-paid workers. And it rarely spends much time at all on the economic effects of emigration. But new research suggests that both these things need to change.Using data from the OECD, a club of rich countries, a new paper (older, un-gated version here) examines the economic effect of immigration during the 1990s. Most interestingly, it looks at the effect of immigration on the wages of “less educated natives”—the group thought to be most damaged by new arrivals.Countries in the OECD have very different immigration rates (the size of the immigrant flow relative to the population). From 1990 to 2000, the United States’ immigration rate was 5.7%. At the other end of the spectrum stood Estonia, with a rate of -16.7%. A negative value means that more people left than arrived:

By 2000, foreign-born residents comprised 7.7% of OECD countries’ populations—and about half of that group was from other OECD countries. In other words, there is a fair amount of within-OECD movement. What is more, in pretty much all OECD countries recent immigrants are more likely to be college graduates than are members of the native population.The paper shows that immigration has positive effects on the average wages of less educated workers in OECD countries. (These increases tend to be higher than the …

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