The effect of immigration on wages in the U.S. labor market

Abstract

Immigration is a polarising topic. Everyone seems to have an opinion about it and the political debates about its effects on national economy arise again and again. There are numerous studies that have come to different conclusions about immigration’s effect on native workers’ wages and on the labor market. In this bachelor’s thesis I review previous empirical studies and aim to draw some general conclusions about how the studies arrive to their different findings. According to the supply and demand theory of competitive labor market, an increase of labor force, such as immigration, should lower the wages of native workers on the short run. On the other hand, in the long run the studies indicate that immigration has a positive or an imperceptible effect on wages.