American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Labor Market Competition and the Assimilation of Immigrants
American Economic Review
(pp. 1682–1722)
Abstract
This paper shows that the wage assimilation of immigrants is the result of the intricate interplay between individual skill accumulation and dynamic labor market equilibrium effects. When immigrants and natives are imperfect substitutes, rising immigrant inflows widen the wage gap between them. Using a production function framework in which workers supply both general and host-country-specific skills, we show that this labor market competition channel explains about one-fifth of the large increase in the average immigrant–native wage gap across arrival cohorts in the United States since the 1960s. The results further reveal substantial heterogeneity across different groups of immigrants.Citation
Albert, Christoph, Albrecht Glitz, and Joan Llull. 2026. "Labor Market Competition and the Assimilation of Immigrants." American Economic Review 116 (5): 1682–1722. DOI: 10.1257/aer.20220865Additional Materials
JEL Classification
- J22 Time Allocation and Labor Supply
- J23 Labor Demand
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- J61 Geographic Labor Mobility; Immigrant Workers
- K37 Immigration Law
- O33 Technological Change: Choices and Consequences; Diffusion Processes