Does immigration impact native-born workers? New study by Cleveland Fed and ECB researchers says ‘yes’

While small, the effects are not insignificant

A number of studies have sought to estimate the impact of foreign-born workers on native-born workforces. While many of these studies have focused on the consequences for wages or unemployment, few have examined the phenomenon of people choosing to relocate across state lines or even leave the workforce altogether.

A new study by Federal Reserve Bank of Cleveland researcher Roberto Pinheiro and Allan Dizioli of the European Central Bank and International Monetary Fund finds a small, but statistically significant increase in the probability of a worker dropping out of the labor force, or migrating to another state, as the fraction of the foreign–born population increases.

The effects of this increase in foreign–born workers were concentrated on native–born, less–educated workers. Key findings include:

• Native–born workers with a high school diploma or less were 1.71 percent more likely to move out of state when the foreign–born fraction of the local labor force saw a 10 percent increase.
• College–educated native–born workers were 1.45 percent more likely to move with the same 10 percent increase in the fraction of foreign–born workers.
• Native–born workers with a high school diploma or less were also 0.46 percent more likely to drop out of the workforce altogether with a 10 percent rise in the fraction of foreign–born workers in the local labor market.

“Less–educated native–born workers react to a larger stock of foreign–born workers by either moving to a different state, or dropping out of the labor force. In terms of magnitude, the effect is small but not insignificant,” say Dizioli and Pinheiro.

Read the full report: Do Foreign–Born Workers Cause Native–Born Workers to Move or Leave the Labor Force?

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892