When immigrants move in, local students switch their majors and end up making way more money than they ever would have without them.
SSRN · March 18, 2026 · 6331798
The Takeaway
Most debates about immigration focus on whether it lowers or raises wages for existing workers in a vacuum. This study reveals that students are so sensitive to these shifts that they strategically switch career paths, and this relocation is so effective that it doesn't just offset competition—it actually leaves the native-born population earning more than they did before.
From the abstract
We develop and estimate a dynamic general equilibrium model in which forward-looking students choose college majors in response to immigration-induced task price movements. Our framework closes the loop between immigrant labor supply, education decisions, and future native wages. We show that endogenous native reallocation not only offsets but more than fully reverses the partial-equilibrium wage effect of immigration, generating long-run wage responses that differ sharply from static estimates.