Do immigrants displace native workers? Evidence from matched panel data

Abstract 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.