Wage and employment effects of immigration: Evidence from South Korea

Abstract This paper studies the impact of immigration on native labor market outcomes in South Korea. We exploit the variation in immigration flows in an education-experience cell and find that, on average, immigration has no harmful effect on the wages or employment of native workers. However, there is a great heterogeneity of wage effects across education groups: high school dropouts suffer from the adverse effects, whereas the effects for college graduates are positive. We find the potential explanation for these differential effects in the suggestive evidence on the degree of substitution. Specifically, we examine the similarity of occupational distribution between natives and immigrants and assimilation patterns for immigrants.