Immigration and Labor Market (Mis)Perceptions

• DOI: 10.1257/pandp.20221004
• Publication Date: 2022-05-24T12:39:16Z
• Authors: Nicolás Ajzenman; Patricio Dominguez; Raimundo Undurraga
• Keywords: 16 Peace; 330; justicia e instituciones sólidas; 0502 economics and business; 05 social sciences; 8. Economic growth; 1. No poverty; justice and strong institutions; Ciencias sociales; 16 Paz; 300

Exposure to immigrants often triggers sentiments of hostility and backlash among native-born populations. Among the main concerns identified by surveys, labor market conditions typically rank at the top. We combine a two-way fixed effects model with a Bartik-type 2SLS model to causally estimate the effects of immigration on labor outcomes in Chile, where the foreign-born population almost tripled in five years. While immigration did not systematically affect employment levels, it did cause an increase in unemployment-related concerns. Our results provide a plausible hypothesis to explain the backlash against immigrants: misperception regarding the effect of immigrants on labor market conditions.