Abstract
Using census data for 1996, 2001 and 2007 the author study the labor market effect of immigration in South Africa. In this period the share of foreign born over the total population has grown by almost fifty percent, and both the characteristics and geographical distribution of immigrants show substantial variation over time. The author exploit these features of the data to carry out an analysis that combines both the 'spatial correlation' approach pioneered by card (1990) and the variation across schooling and experience groups used by Borjas (2003). The author estimate that increased immigration has a negative effect on natives employment outcomes, but not on total income. Furthermore, we find that skilled South Africans appear to be the most negatively affected subgroup of the population.
Highlights
Recent evidence suggests that South–South migration is a sizeable phenomenon
We find heterogenous results for immigration across different types of workers: The impact of immigration on natives’ self–employment rates – which was insignificant in the districtlevel OLS and IV regressions – is positive and significant in the national-level regressions
We study the labor market effect of immigration, looking at its impact on both natives’ employment rates and incomes
Summary
Recent evidence suggests that South–South migration is a sizeable phenomenon. For instance, Ratha and Shaw (2007) estimate that 74 million, or nearly half, of the migrants from developing countries live and work in other developing countries. Immigration may have an impact on natives’ formal labor–market participation (i.e., immigration may lead South African workers to move to the informal labor market which would amount to a decline in natives’ formal employment rates) Another indirect channel is through the impact of immigration on natives’ location within the country (i.e., immigration may induce natives’ outflows to other districts and, to the extent that employed natives are more likely to leave than unemployed ones, this amounts to a decline in natives’ employment rates in the district considered). We find heterogenous results for immigration across different types of workers (i.e. employees vs self-employed): The impact of immigration on natives’ self–employment rates – which was insignificant in the districtlevel OLS and IV regressions – is positive and significant in the national-level regressions This findings can be interpreted in the light of the theoretical framework developed by Borjas (2006) to understand the link between the so called “spatial correlation” approach and “national level” studies of the impact of international migration.
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