The Elasticity of Substitution between Native and Immigrant Labor: A Meta-Analysis

Abstract

This paper presents the first comprehensive meta-analysis of the elasticity of substitution between native and immigrant labor, drawing on 1,091 estimates from 41 studies. We find strong evidence of selective reporting: less precise estimates are systematically associated with lower reported elasticities. Correcting for this bias using meta-regression and selection methods raises the implied elasticity from about 13 to about 22, implying about 40% less wage pressure from immigration than uncorrected results suggest. Bayesian and frequentist model averaging show that heterogeneity is driven mainly by geographic scale, data granularity, and low worker experience, while the choice between log(mean wage) and mean(log wage) plays a secondary role. Our best-practice estimates, which net out publication bias and prioritize the most granular data, imply an elasticity of about 17 for regional models – lower than a simple bias correction but substantially higher than the uncorrected mean.

Cite

Klara Kantova, Tomas Havranek, Zuzana Irsova, and Jiri Schwarz (2026). “The Elasticity of Substitution between Native and Immigrant Labor: A Meta-Analysis.” CEPR Discussion Papers 21326.

@techreport{Kantova2026Elasticity,
  author      = {Kantova, Klara and Havranek, Tomas and Irsova, Zuzana and Schwarz, Jiri},
  title       = {{The Elasticity of Substitution between Native and Immigrant Labor: A Meta-Analysis}},
  year        = {2026},
  institution = {Centre for Economic Policy Research},
  type        = {CEPR Discussion Papers},
  number      = {21326},
  url         = {https://jirischwarz.eu/research/immigrant-labor/}
}

Topics

Meta-analysis, Labor economics