Research Topics

In this policy note, Research Scholar Fernando Rios-Avila and Gustavo Canavire-Bacarreza, Universidad EAFIT, observe that immigration in the United States has a small but statistically significant impact on the labor market behavior of native-born unemployed workers. Their chances of transitioning from unemployment to employment are not affected by the share of immigrants in their job markets, but the native-born unemployed are more likely to leave the labor force when living in areas with a higher relative concentration of immigrants. Three additional results of the study shed light on what might be contributing to this higher rate of labor market exit, with each pointing to the potential role of expectations in creating a discouraged worker effect among the native-born unemployed in high-immigration states. 

The Effect of Immigration on Unemployment Transitions of Native-born Workers in the United States

Although one would expect the unemployed to be the population most likely affected by immigration, most of the studies have concentrated on investigating the effects immigration has on the employed population. Little is known of the effects of immigration on labor market transitions out of unemployment. Using the basic monthly Current Population Survey from 2001–13 we match data for individuals who were interviewed in two consecutive months and identify workers who transition out of unemployment. We employ a multinomial model to examine the effects of immigration on the transition out of unemployment, using state-level immigration statistics. The results suggest that immigration does not affect the probabilities of native-born workers finding a job. Instead, we find that immigration is associated with smaller probabilities of remaining unemployed, but it is also associated with higher probabilities of workers leaving the labor force. This effect impacts mostly young and less educated people.