Do Immigrants Displace Native Workers? Evidence from Matched Panel Data

Using rich matched employer-employee panel data, we analyse the impact of immigrants on

natives’ employment. Unlike most of the existing literature, we draw on matched data and focus

at the firm, occupation and worker levels, which enables us to link the labour market outcomes

of natives and immigrants precisely at the locus where many popular beliefs are formed. This

paper, therefore, provides a novel test of complementarity and substitutability between the

natives and immigrants. Our main result shows that, contrary to previous evidence, natives at

even the lower end of the skills spectrum have their employment positively affected by the

presence of immigrants in the same firm and occupation. The results highlight the importance

of suitable data to properly assess the impact of migration on host country’s labour market.