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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration
substitutes for unskilled labor in Los Angeles, for example, is inherently much larger than for unskilled labor in the United States. Unskilled labor in all other labor markets constitutes to some degree a substitute for similar workers in Los Angeles. The implication is that the demand curve for unskilled labor must be much more elastic than the demand curve for unskilled labor defined at the national level. With very elastic demand curves at the local level, wages cannot fall very much as a consequence of the arrival of immigrants.
There are also supply-side adjustments that may mitigate any strong local labor market wage changes. The key issue is whether immigration affects patterns of net migration of native-born Americans across geographic boundaries. If low-skilled immigrants into California simply increase out-migration flows from California of domestic low-skilled workers or reduce the number of similarly skilled in-migrants into California, the size of the "supply" effects induced by immigration is considerably muted. Similarly, any wage effects caused by immigration will not be limited to California but will be dispersed across the country. This question of the internal migration reactions to immigration is the subject of William H. Frey and Kao-Lee Liaw's chapter, "The Impact of Recent Immigration on Population Redistribution Within the United States."
Frey and Liaw demonstrate that immigrants continue to locate in the same relatively few places. For example, just ten metropolitan areas accounted for two-thirds of all immigrant growth. In contrast, domestic migrants are far more eclectic in their choices of where to live. In recent years, domestic migrants have tended to relocate in places other than those attracting immigrants. Moreover, there exists considerable out-migration from high-immigration states, especially among less-skilled natives. For example, between 1990 and 1995, net immigration into Los Angeles was 792,712, whereas net internal migration was -1,095,455. During these years, internal migrants were attracted instead to the economically booming areas of the Sun Belt and the South.
Although the primary motivation for these internal migrants was the "pull" of the attractive economic circumstances in booming areas, the question Frey and Liaw pose is to what extent immigration also influenced these internal flows. This possibility is suggested by the fact that the out-migration from immigration-intensive areas was also concentrated among less-skilled native-born residents. Because it is difficult to control for all other confounding factors, causation is a very tricky business. In particular, demand shocks vary considerably across areas in very complex ways. With that important caveat in mind, Frey and Liaw conclude that immigration did induce out-migration of native-born workers. For people with a high school education or less, Frey and Liaw estimate that California would lose 51 net internal migrants for every 100 similarly skilled international migrants who arrived during the last five years.