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Are Immigrant Workers Imperfectly Substitutable?

Many wage studies suggest that immigrant workers are imperfectly substitutable for native-born workers who have similar educational attainment and experience. Relying on U.S. Census and ACS data, I ask, to what degree do language skills drive this? I suggest that immigrants who arrive to the United States at young ages, both have stronger English skills and exhibit greater substitutability for native-born workers than immigrants who arrived later. Similarly, immigrants with poor English skills will be more responsive to the supply of immigrants and their relative wages will suffer more than English-speaking immigrants. In large cities, where Spanish speakers are concentrated, I observe the emergence of a “Spanish-speaking” labor market. In these markets, the benefit of English language proficiency is low. Finally, in Puerto Rico, where almost all workers speak Spanish, immigrants and natives are perfect substitutes.
Studies by researchers ranging from the more conservative George Borjas to the liberal David Card have all found that the massive flow of immigrants into the U.S. has h…

 

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