Immigrants' Effect on Native Workers: New Analysis on Longitudinal Data

Using longitudinal data on the universe of workers in Denmark during the period 1991–2008, we track the labor market outcomes of low-skilled natives in response to an exogenous inflow of low-skilled immigrants. We innovate on previous identification strategies by considering immigrants distributed across municipalities by a refugee dispersal policy in place between 1986 and 1998. We find that an increase in the supply of refugee-country immigrants pushed less educated native workers (especially the young and low-tenured ones) to pursue less manual-intensive occupations. As a result immigration had positive effects on native unskilled wages, employment, and occupational mobility. (JEL J15, J24, J31, J61, J62)