TY - JOUR AU - Borjas,George J. AU - Freeman,Richard B. AU - Katz,Lawrence F. TI - On the Labor Market Effects of Immigration and Trade JF - National Bureau of Economic Research Working Paper Series VL - No. 3761 PY - 1991 Y2 - June 1991 UR - http://www.nber.org/papers/w3761 L1 - http://www.nber.org/papers/w3761.pdf N1 - Author contact info: George J. Borjas Harvard Kennedy School 79 JFK Street Cambridge, MA 02138 Tel: 617/495-1393 Fax: 617/495-9532 E-Mail: gborjas@harvard.edu Richard B. Freeman NBER 1050 Massachusetts Avenue Cambridge, MA 02138 Tel: 617/868-3900 Fax: 617/868-2742 E-Mail: freeman@nber.org Lawrence F. Katz Department of Economics Harvard University Cambridge, MA 02138 Tel: 617/495-5148 Fax: 617/613-1245 E-Mail: lkatz@harvard.edu M1 - published as George J. Borjas, Richard B. Freeman, Lawrence F. Katz. "On the Labor Market Effects of Immigration and Trade," in George J. Borjas and Richard B. Freeman, editors, "Immigration and the Workforce: Economic Consequences for the United States and Source Areas" University of Chicago Press (1992) M2 - featured in NBER digest on 1991-12-01 AB - In the 1980s, the wages and employment rates of less-skilled Americans fell relative to those of more-skilled workers. This paper examines the contribution of the continuing inflow of less-skilled immigrants and the increasing importance of imports in the U.S. economy to these trends. Our empirical evidence indicates that both trade and immigration augmented the nation's supply of less-skilled workers, particularly workers with less than a high school education. By 1988, trade and immigration increased the effective supply of high school dropouts by 28 percent for men and 31 percent for women. We estimate that from thirty to fifty percent of the approximately 10 percentage point decline in the relative weekly wage of high school dropouts between 1980 and 1988 can be attributed to the trade and immigration flows. In addition, our analysis suggests that from 15 to 25 percent of the 11 percentage point rise in the earnings of college graduates relative to high school graduates from 1980 to 1985 can be attributed to the massive increase in the trade deficit over the same period, but that the effects of trade on the college/high school wage differential diminished with improvements in the trade balance during the late 1980s. ER -