Impact of Active Labor Market Programs on Immigrant and Native Workers

Abstract

Active Labor Market Programs (ALMPs) such as job training are aimed at improving the productivity of immigrant workers, thereby increasing their wages and employment opportunities. However, they may substitute and harm the labor outcomes of native workers. In the United States (US), AMLPs are provided to both native and immigrant workers; however, their total effect on the labor outcomes of natives are ambiguous. This study examines the direct and indirect impact of ALMPs using difference-in-differences analysis and exploiting varying establishment dates of institutions in the US. The results revealed that ALMPs reduced wages and employment rates of native workers through the immigrant influx.