What happens to the careers of European workers when immigrants “take their jobs”?

A new IZA Discussion paper by Cristina Cattaneo, Carlo V. Fiorio and Giovanni Peri evaluates the effect of immigrants on the career of natives. The authors follow native individuals who have been exposed to competition of immigrants in European countries. In countries and occupations with more competition between native and immigrants they find that natives are pushed to faster occupational upgrades towards jobs using more sophisticated skills, requiring higher education and paying higher wages. Natives are also more likely to undertake enterpreneurial activities in response to larger immigrant competition. This implies that immigrants “push up” natives in the labor market and the overall effect on wages and income of natives is small and usually positive. The implications of these findings are that immigrants do not hurt native labor market opportunities but rather create incentives for their improvement. By filling manual and less-skilled occupations immigrants encourage native careers. More open immigration policies, combined with flexible labor markets, could result in better opportunity for the career of natives.