In August, 2010, CBS News and Vanity Fair commissioned a national poll that asked 1082 people, ““Do you think illegal immigrants coming into this country take jobs away from American citizens, or do they mostly take jobs Americans don't want?” Nearly 90 percent of the respondents chose one of the two options offered but 34 people said they had no opinion on the subject and 105 volunteered that it was a bit of both. Suppose we drop the latter two groups and specify: Percent Figure 1. Attitudes about whether Immigrants take Jobs away from natives by education

Immigrants Take Jobs…All High School & less College & more Away42.5%52.6%33.6% Nobody else wants57.5%47.4%66.4%

“Conventional Model”

The United States has a guest worker (GW) program that allows American employers to hire temporary foreign laborers to fill low- skilled jobs such as lawn care (LC) workers. To hire one of these workers, an employer must apply for a H-2B visa, presenting evidence that the company could not find native workers willing to fill the jobs Source: Seminara, David. (2010) “Dirty Work: In-Sourcing American Jobs with H-2B Guestworkers,” Center for Immigration Studies.

Supply of Native Lawn-Care Workers Supply of Guest Lawn-Care Workers Supply of Lawn-Care Workers Lawn Care Workers (thousands per year) Wage ($ per hour)

Market for Lawn-Care Workers Lawn Care Workers (thousands per year) Wage ($ per hour)

The Immigration Equation By Roger Lowenstein. The New York Times Magazine, July 9, 2006 Mannuel I. Immigrant from Guatemala. House Painter. Norma M. Immigrant from Mexico Housecleaner. Salvador C. Immigrant from Mexico. Construction. The question of whether “more job seekers from abroad mean fewer opportunities, or lower wages, for native workers -- is one of the most controversial ideas in labor economics.”

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Figure 1. California Manicurists,

Empirical Specification Los Angeles CA Manicurists, 2002 Non-Viet Manicurists (#) Viet Manicurists (#) Non-Viet Manicurists (#) Viet Manicurists (#) Time Trend…T=0,…,15 Do Vietnamese manicurists displace native manicurists?

Empirical Specification Non-Viet Manicurists (# per 1000 residents) Viet Manicurists (# per thousand residents) Time Trend…T=0,…,15 Do Vietnamese manicurists displace native manicurists?

Non-Vietnamese Manicurists per 1,000 Residents OLS(2) Viet. Manicurists per 1,000 Residents-0.388*** (11.40) Time Trend ** (2.25) Constant1.346*** (53.92) Observations544 R-squared0.346 Absolute value of t-statistics in parentheses * significant at 10%; ** significant at 5%; *** significant at 1% Table 1. Explaining the Number of Non-Vietnamese Manicurists using WLS

Empirical Specification True Model Unobserved demand shocks that vary across cities, e.g., increased demand by “tweens” and their parents in Contra Costa, according to a couple of newspaper articles.

Increases in demand increase the number of native manicurists. Vietnamese manicurists are drawn to cities with positive demand shocks and away from those with negative shocks. Displacement effect Upward bias: the expected value of the estimated displacement effect is less negative than the true displacement effect.

Instrumental Variable (IV) Estimation z = historical size of Vietnamese enclave (VietEnclave)

endogenous component, being part of the market for manicurists. exogenous component, being determined outside of the market for manicurists The historical size of Vietnamese Enclaves (VE) is likely to be a valid instrument.

Non-Vietnamese Manicurists per 1,000 Residents OLS2SLS or IV Viet. Manicurists per 1,000 Residents-0.388***-0.703*** (11.40)(11.88) Time Trend **0.013*** (2.25)(2.66) Constant1.346***1.374*** (53.92)(50.69) Observations544 R-squared Absolute value of t-statistics in parentheses * significant at 10%; ** significant at 5%; *** significant at 1% Table 1. Explaining the Number of Non-Vietnamese Manicurists using WLS