Should Workers of the World Unite? Native-Migrant Wage Gap and Labor Market Power
How does the balance of labor market power between employers and workers impact the wage gap between natives and immigrants? Immigrants often face structural disadvantages in the labor market, which may position them as outsiders relative to native workers in wage-setting institutions. Using data from the Current Population Survey and labor market concentration measures in the United States, this paper focuses on the effect of concentration and unionization on the native-migrant wage gap. Using an instrumental variables approach, my results show that labor market concentration widens the wage gap, especially among workers without union coverage. In contrast, union coverage is associated with higher wages for both natives and immigrants, though the effect is stronger for natives, indicating that unions tend to benefit market insiders more.