THE IMPACT OF IMMIGRATION ON UNEMPLOYMENT AND EARNINGS AMONG RACIAL MINORITIES IN THE UNITED-STATES

The existing immigration literature presents inconsistencies and contr adictions. Some studies suggest that immigration has no effect on the earnings and employment levels of native-born minorities, while others offer contrary evidence. In an effort to make more progress, a study was done to examine the impact of immigration on unemployment and earn ings among racial minorities in the US. Employing United States census data covering 1940 to 1980, and using states and a sample of metropol itan statistical areas as units of analysis, this study found that inc reases in immigration in some periods of US history had significant ne gative effects on employment levels among racial minorities in the Uni ted States. Specifically, results of the regression analysis showed th at, in 1970, a standard deviation change in immigration increased unem ployment among minorities by nearly 14 per cent, while in 1980 unemplo yment increased by nearly 10 per cent, given a standard deviation incr ease in immigration. With regard to earnings, the study found that imm igration decreases minority income. In 1980 a one per cent increase in immigration reduced racial minority earnings, on average, by nearly $ 25.32. Analysis also showed that low skill levels among minorities, as well as family breakdown may in part be responsible for high minority unemployment and low earnings. For example, in 1980 a one per cent in crease in divorce reduced minority earnings, on average, by $65.89. Lo w minority skill levels reduced earnings by $104 on average. However, the deleterious effects of immigration on racial minority unemployment and earnings remain even after adjusting for the potentially confound ing effects of skill levels and divorce. Policy implications of the fi ndings are discussed at length, and suggestions are proposed for futur e research.