CEPII Meta-Analysis (2025): The Comprehensive Wage Effects of Immigration
A comprehensive meta-analysis by Clément Nedoncelle, Léa Marchal, Amandine Aubry, and Jérôme Héricourt (CEPII Working Paper 2025-07, published May 2025) provides a major empirical synthesis of the reduced-form literature on the wage effects of immigration. Synthesizing findings from 88 studies published between 1985 and 2023, the paper establishes a broad consensus on the aggregate impact while identifying the methodological and contextual drivers of wage elasticity heterogeneity.
Core Findings
- Centered Around Zero: The meta-analysis confirms that the average wage effect of immigration on native workers is centered extremely close to zero1. The authors' benchmark average wage elasticity is estimated at -0.005, indicating that a 10% increase in the immigrant share of the labor force corresponds to a statistically and economically negligible wage decline of 0.05% for native workers.
- Methodological Bias Corrections: The study highlights the critical role of econometric specifications in shaping results. Specifically, it finds that shift-share instrumental variables (such as the Card/Alpert-style geographic instruments) successfully correct for the upward bias of standard Ordinary Least Squares (OLS) regressions. OLS estimates often suffer from upward bias because immigrants self-select into booming, high-wage regions and industries, which can make the raw correlation between immigration and wages appear artificially positive.
- Heterogeneity and Context: While the aggregate effect is negligible, the paper identifies substantial heterogeneity across studies. This variation is driven by:
- Geographical Scale: Local labor market studies (spatial correlation methods) tend to find smaller wage effects due to native worker out-migration and inter-regional trade, which diffuse the localized shock across the wider economy.2
- Skill and Occupational Definitions: Studies that define skill groups by education and experience (structural skill-cell approaches, as in Labor Economics Consensus: Skill-Group Effects and the NASEM Report) find more pronounced negative effects on specific substitute groups, whereas studies looking at broader occupational aggregates find negligible or positive effects due to native-immigrant task complementarity.
- Call for Transparency and Replication: The authors emphasize that the high variance in reported elasticities across the literature underscores a pressing need for systematic replication studies and enhanced transparency in methodological reporting to ensure policy recommendations are grounded in robust, reproducible evidence.
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An instance of Labor supply shocks fail to depress native wages because new workers generate their own demand. — A robust synthesis of hundreds of micro-level studies confirms that the aggregate wage elasticity of immigration remains virtually non-existent. ↩︎
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An instance of Localized labor supply shocks diffuse across the wider economy without depressing average native wages. — It establishes that geographic mobility and trade act as safety valves that spread local labor supply spikes across a much wider geographic footprint. ↩︎