Working Paper

Does immigration crowd natives into or out of higher education?

Abstract: Over the past several decades, the United States has experienced some of its largest immigrant inflows since the Great Depression. This higher level of immigration has generated significant debate on the effects of such inflows on receiving markets and natives. Education market studies have found that inflows of immigrant students can displace some natives from enrollment. Meanwhile, labor market studies have primarily examined the impact of immigrant labor inflows on the wages of similarly and dissimilarly skilled natives, with mixed results. The lack of consensus in the wage studies has spurred a growing line of research on whether natives respond endogenously to immigrant worker inflows. Yet, it remains unexplored whether native responses in the higher education market also contribute to the absorption of immigrants into the labor market and the effects on equilibrium in both markets. In a unified framework of the education and labor markets this paper addresses whether skill level via college enrollment is another margin on which natives endogenously adjust to immigrant inflows of students and labor. This study differs from previous research by separately identifying native human capital accumulation responses to both immigrant labor and student inflows at the college margin, where such responses may be strongest due to the high school-college wage gap. The analysis also contributes to our understanding of how local markets respond to immigrant inflows.

JEL Classification: H75; J22; J23; J24; J61;

Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Working Papers

Publication Date: 2015-10-01

Number: 15-18

Pages: 64 pages