Speaking of the labor market, immigration is one of the most debated topics, especially the effect of immigration on wages and employment rates of natives as well as on the productivity of countries. This paper summarizes the existing literature dealing with the elasticity of substitution between native and immigrant labor. We correct the average estimate for publication bias and examine the heterogeneity. Publication bias is likely in the literature estimating this elasticity as the literature provides all types of results. No recent meta-analysis deals with the elasticity of substitution between those two groups, which is crucial for policymakers. Uncorrected mean implied elasticity from the existing literature is 13. The implied elasticity of substitution corrected for publication bias is around 25. In other words, immigrants and natives are imperfect substitutes but more substitutable than the existing literature assumes. We use linear as well as nonlinear tests for publication bias and model averaging techniques that account for model uncertainty to derive the results.

Authors:
Klára Kantová, Charles University, Czech Republic
Tomas Havranek, Charles University, Czech Republic
Zuzana Havrankova, Charles University, Czech Republic

About the Presenter(s)
Ms Klára Kantová is a University Doctoral Student at Institute of Economic Studies, Faculty of Social Sciences, Charles University in Czech Republic

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