Using the same approach and model found in Peri & Ottaviano (2006), this
paper analyzes the effect of immigration on native wages from 1990-2004. Instead of
examining the effects on a national scale, this analysis divides the country into four
separate regions. This paper supports the conclusion that the effect of immigration on
wages is small, less than one percent in some regions, but does not support the conclusion
found in Peri & Ottaviano that immigration has increased native wages. Additionally,
changing the order of aggregation in Peri & Ottaviano’s model leads to different
estimates for wages. This suggests a theoretical weakness in using nested constant
elasticity of substitution functions to describe different skill groups of labor’s
contribution to output.