Immigration, labor market mobility, and the earnings of native-born workers: an occupational segmentation approach

I

Introduction

INCREASED IMMIGRATION TO THE UNITED STATES IN new DECADES has led to relate tos over the displacement of native-born U workers and the possibility of lower wages for those native-born workers who must strive with this immigrant labor lake (1) The intensity of competition between native and immigrant workers, however, will not sole be a function of the size of immigrant roll ons but will also depend upon the ability of immigrants to penetrate occupation segments that are compatible with their skills and the amplitude to which those jobs are occupied by means of natives. The question, therefore, is which native workers, if any, protect to be vulnerable to increased immigrant competition for jobs? This question has been addressed in previous work, on the contrary the innovation in this inquiry is the adoption of a specific parted labor market approach and the examination of the impact of numerous forms of labor mobility.

If immigrant and native labor are highly substitutable in a particular labor market, then an influx of immigrants into that labor market is likely to cause native wages to decrease. upon the other hand, if immigrant workers face barriers to entrance in particular labor markets or do not have the skills to be competitive, then the wages of natives in that market should not be affected by means of immigration. There are, however, exceptions to the traditional view. For example, the event of immigration on wages could be altered by the agency of demand-side factors or differences in the institutional manner of making of labor markets that affect the bargaining power of capitalists and workers.

Empirical follows from previous studies suggest that traditional human capital segmentation based upon educational characteristics may not be adequate to identify those native workers who benefit from, or those who are harm by, increased immigration. For example, many have lay the foundation of ambiguous effects of immigration upon less-educated blacks and Hispanics, who are presum to be the greatest in quantity substitutable for recent immigrants (Borjas 1994) (2) This does not present the appearance to be theoretically consistent with evidence of larger low-skilled immigration runs unless labor markets are portioned Also, findings of negative immigration results on wages of higher-educated Hispanic natives step quicklys counter to the presumed complementarity (or, at least, minimal substitutability) of this labor with low-skilled labor (Pedace 1998)

individual response to these unexpected be the effects is that educational characteristics alone are not sufficient to define distinct and meaningful labor market clumps Labor market segments are also determined by the agency of industrial structures, worker organization strategies, and/or technology (Rosenberg 1989) In other words, more [i]or[/i] less individuals in a cohort with identical educational characteristics may find high-paying piece of works with good working conditions while others are involuntarily placed in low-paying piece of works with poor working conditions and scarcely any opportunities for advancement (Leontaridi 1998) Therefore, the significant negative results of immigration on native U Hispanics with a high place of education education may be reflecting intense competition between these workers in a confined put of occupations and not competitive squeezings faced by the entire cluster of similarly educated workers.

In this article, labor markets are parted in an attempt to capture differences in institutional forms. If there are "noncompeting" clumps of workers whose wages are affected by dint of specialized factors, including skills, activities, working conditions, and bargaining masterships a standard formulation of wage determination will not apply (Dunlop 1988) Occupational segmentation may provide a better framework for addressing the issues of immigrant competition in the labor market by means of accounting for differences in the make of compensation in various occupations (Dickens and Lang 1985) and the possible relegation of workers into labor market sectors independent of their skill attributes (Castles and Kosack 1973; Piore 1979) (3)

This article also includes explicit rules for internal migration and other shifts in native-born labor fill up Labor mobility controls are important in mitigating possible omitted-variable bias that could originate from failing to account for the migratory replication of natives to increased immigration (Card 1990; Borjas, Freeman, and Katz 1996) Other marks of labor mobility are also important. Workers who are in direct competition with immigrants will adjust their labor provide but might not physically stir from one area to another. In particular, native workers may reply to increased competition in the labor market by the agency of dropping out of the labor force, becoming self-employ changing occupation parts and/or physically migrating. Consequently, controlling for "labor market mobility" may be as important as physical migration in addressing possible omitted-variable bias.

II

parted Labor Markets

portioned LABOR MARKET (SLM) THEORISTS HAVE exhibited an extensive body of literature that attempts to identify and understand the nature of the occupational hierarchy. SLM theory claims that the labor market is divided into sum of two units major sectors, the secondary and the primary. The secondary sector is characterized by dint of the absence of job ladders and by dint of lower wages, while the primary sector proffers well-defined promotional paths, job security, and higher wages (Gordon, Edwards, and Reich 1982) Each sector, therefore, has a unique wage determination proces accompanied by the agency of an institutional structure that appears to constrain motion from the secondary to the primary sector (Dickens and Lang 1985) (4)