Are there data on which occupations illegals work in?

A thought on the ‘86 immigration reforms, which have got me a bit confused now. Clearly wages should rise for the formerly undocumented workers, since they can no longer be discriminated against so easily. As for lower-skilled native workers, it must simply come down to the elasticity of substitution between them and the formerly undocumented. If these two groups were complementary then higher wages for undocumented would result in *lower* wages for natives. But seemingly they are strong substitutes so increased wages for one group raises the wage of the other.

Note that this is a bit in opposition to work suggesting that wages should not fall due to immigration because of complementarities between natives and immigrants, as possibly suggested in the comment above from lark. So I’m a bit stumped on this still, I guess. Your explanation is interesting, except that I’m a bit unsure of the idea that natives are competing to work in the fields of the central valley, or in food processing plants in laredo, texas. Perhaps the latter is reasonable actually. Sounds like room for a paper here in any case…

“Following the 1986 immigration reforms, for example, previously-undocumented immigrants experienced big pay boosts – as much as 15 or 20 percent – and immigrants who already had legal status saw hefty wage gains, too. But the reforms also led to higher wages for lower-skilled native-born Americans. ”

This writer argues that immigration reform is good because it raises wages for the lowest tier of the workforce. He also argues that immigration does not lower wages.

How are those things compatible?
If immigration does not lower wages, immigration reform should not raise wages.

Just ran into this, a very nice summary of the literature. Since I also find these issues fascinating I thought I’d add another channel to the potential “zero correlation” culprits. If immigrants are cheaper than natives then there is a very straightforward “productivity effect”. I.e., firms can produce the same output with fewer inputs. As a result, firms that hire more immigrants will do relatively better and will expand output more. This drives up demand for all workers.

Obviously there are many caveats in general equilibrium, but I like this story and have found evidence for it. This story comes from the offshoring literature and makes me think, as usual, there’s a lot to be gained from comparing stories across the literature.

-Greg