Does Immigration, Particularly Increases in Latinos, Affect African American Wages, Unemployment and Incarceration Rates?

Abstract

This paper evaluates the impact of immigration on African American wages, unemployment, employment and incarceration rates using a relatively large cross-sectional data-set of 900 cities. An endemic problem potentially plaguing the cross-sectional metro approach to immigration has been endogeneity. Does increased immigration to a city lead to improved economic outcomes, or does a city's improving labor market attract immigrant inflows? The paper focuses on resolving the endogeneity concerns through a variety of controls, statistical methods and tests. Overall, results strongly support one-way causation from increased immigration including Latinos to higher African American wages and lower poverty. Rising immigration including from Latin America is not responsible for higher Black incarceration rates.