Regional Economic Impacts of Immigration: A Review

A burgeoning literature has emerged during the last two decades to assess the economic impacts of immigration on host countries. In recent years much research has been done at the national level under the assumption that impacts in open regions may dissipate through adjustment processes such as factor mobility. However, this is ultimately an empirical issue. In this paper we revisit the impacts of immigration on wages and employment, particularly at the regional level. We briefly review analytical approaches for identifying local labour market impacts. To obtain some ‘consensus estimates’, a meta-analytic approach is adopted. As a novel contribution to previous meta-analyses on labour market impacts, we use a simultaneous equations approach to the meta-analysis of wage and employment effects. Using 129 effect sizes, we find that the observed local wage and employment effects are very small indeed. Generally, the employment impact is more pronounced in Europe than in the United States. Controls for endogeneity show a somewhat more negative employment impact. Wage rigidity increases the magnitude of the employment impact on the native born and the definition of the local labour market in terms of geography and skills matters. JEL classification: F22, J61, R23