Do immigrant workers create, complement, or displace?

In a modern economy, the dynamics between immigrant and native born workers is so complex that it cannot be reduced to an all-inclusive, simple sum without eliminating 90% of meaningful insight.  Thus, to say that overall immigrants add jobs, do not affect native workers, or compete with native workers is to engage in vast simplification.

Cauimi and Peri came perilously close to vast simplification in a study they released in early 2024. Giovanni Peri is a star academic researcher on immigration who has for some time argued that immigration overall is neutral or positive in its effect on native born workers.

They explain their findings through the concept of complementarity: Immigrants and U.S.-born workers often have different skills and specializations that complement each other rather than compete directly. This complementarity boosts productivity and, in turn, wages for U.S.-born workers. Since 2000, there has been an increase in college-educated immigrants, which has further enhanced the complementary effect, especially benefiting less educated U.S.-born workers.

Pretty much all academic research into the economic impact of immigrants on American workers relies on correlation analysis that deals with association, not cause. Further, these analysis address employment and wages, but not productivity, the investment decision, job switching, career switching, or domestic migration. Nor do they deal with the secondary effects. These analyses cannot capture the possibility that immigrants concentrate on geographic locales and occupations where they perceive substantial growth requiring new workers.

An example of immigrant impact which has a very rich story that is lost in statistical analysis typically done is the independent motel industry. About 60% of all hotels in the US are owned by Indian Americans, and this group may own at least 80% of all motels in small towns.   I addressed this phenomenon here.   At the core of this story is the evolution of a business model crafted by Indian immigrants that facilitated the voluntary purchase/sale of motels and hotels from native owners, and which preserved the viability of thousands of motels in the country.

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