Immigration: How Does It Impact the Wages of Native Workers?

I have worried about the talk, in recent times, that immigrants hurt the wages of native workers in the host nation. If so, that is not a good outcome. Why should native workers lose out to immigrants? To come to terms with my worry, I began to experiment with a classic dataset on immigrants and native worker wages, which was assembled about 15 years ago. At that time, this dataset appeared to signal that there exists an immigrant effect independent of skill set (e.g., education) that reduces the wages of native workers. Specifically, the indication was that the proportion of immigrant workers (p) is a standalone exogenous variable, among others, in a linear regression model that can explain native worker wages without including, in the model, the interaction of p with skill set. In my experimentation, I find that p cannot be a standalone variable in the model and at the same time: 1) be competitive in terms of cross validation predicted residual error sum of squares; and 2) be immune to the shocks from ridge regression, for small values of the ridge tuning parameter. My experiments indicate that immigration differentially impacts native worker wages across skill sets. In particular, for a 10% increase in immigrants, the average wage of native workers is impacted as follows: a) there is about a 5% drop (in native worker wages) for High school dropouts; b) about an 8% drop for High school graduates; c) about a 2% rise for those with some college education; and d) about a 6% rise for College graduates. This impact is, generally, monotonic in skill. Based on my experiments, I am led to cultivate the view that the overall (or net) impact of immigrants on native worker wages is based on their skill set shares. Several researchers have found little overall impact of immigrants on native worker wages; and, based on my view, it is not at all clear to me that there is anything unreasonable about their finding. That being said, Governments should nudge, and facilitate, native workers to acquire skills beyond those a High school education can provide; and ensure that labor market tests are correctly applied, especially in circumstances where it becomes quite difficult to price the deployment of a lower level skill like mopping the floor or driving a truck. Disciplined immigration will not harm the fabric of a nation. Economic inequality will.