Borjas, Wages, and Immigration: The Complete Story
George Borjas is the source of the widely-quoted factoid that immigration has reduced the wages of low-skilled natives by 8%. So I was quite surprised to discover the following table when I was flipping through Borjas’ labor textbook:
|Short Run||Long Run|
|All native workers||-3.4%||0.0%|
|High school dropouts||-8.2%||-4.8%|
|High school graduates||-2.2%||+1.2%|
The -8% is right there in bold. What is striking are all the numbers that didn’t become factoids, but should have:
The long-run effect on all native wages is zero. Immigration has enabled millions to live vastly better lives with no long-run effect on average wages.
The long-run negative effect on native high school drop-outs is roughly half the short-run effect.
The long-run wage losers from immigration are native dropouts and college grads. Native workers in the middle of the skill distribution actually gain.
And this is what passes in economics for pessimistic estimates of the effect of immigration.