20 unskilled workers to work with. However, the effect on unskilled natives is a priori indeterminate, since, while they, too, benefit from increased investment, they will confront increased competition from the unskilled migrants. Which of these effects dominates will depend critically on the extent, to which the unskilled migrants are close substitutes for domestic unskilled workers, a question that has been extensively studied.

Most – though not all ‐ studies of the effect of unskilled migration on the wages of unskilled workers find only small negative effects. The early literature on the subject typically concluded that a 1 percent increase in the immigrant share in the population causes no decline in wages or a decline of 0.1 percent. These “area studies” attempted to exploit the variation in migration incidence across countries, or more typically, across localities in the United States<sup>26</sup> .

However, as Borjas pointed out in a landmark contribution, the area studies often failed to contend with a serious endogeneity problem, since the intensity of migrants in a specific locality is itself influenced by wage and employment opportunities, tending to bias the estimated effect of migration on wages severely downwards (2003). The additional criticism on studies that correlate the variation in immigration intensity across localities in the United States with wages is that natives (and other migrants) compensate for increased migration by moving elsewhere.

Borjas’ critique gave rise to many studies that tried to get around the endogeneity problem. For example, Ottaviano and Peri (2008) estimated a production function including groups of workers classified by education, experience, gender and origin to evaluate the degree to which immigrants substitute for other workers. They reach the conclusion that unskilled immigrants and natives are imperfect substitutes in the United States, and similar studies reached the same conclusion in the UK and Germany<sup>27</sup> . Immigrants who do not speak the language, often cannot read and write in Latin script, have scant social networks, and relatively low expectations, tend to get and do different jobs than unskilled natives, so compete with them only indirectly. Many of today’s refugees, hailing from Syria, Afghanistan, and parts of Sub‐Saharan Africa conform to this description.

Another solution to the endogeneity problem, which also turns out to be highly relevant to the study of forced migration, was to examine instances of mass migration which are prompted by political or other external events and therefore are not plausibly in response to labor market conditions in the receiving country.

The first of these studies was David Card’s classic analysis of the influx of Cuban migrants to Miami during the 1980 Mariel Boatlift (named after the port in Cuba where the boatlift took place) (1990). Card found that, although many of the Mariel immigrants were unskilled and they increased the labor force of the Miami metropolitan area by 7 percent in less than one year, they had virtually no effect on the wage rates or unemployment levels of less‐ skilled 26A partial list of these studies includes Altonji and Card (1991), Butcher and Card (1991), LaLonde and Topel (1991), and Schoeni (1997) 27 Studies have reached similar conclusions in other countries: Manacorda et al. (2006) for the UK, and for Brücker and Jahn (2011), D’Amuri and Peri (2011) and Felbermayr et al. (2010) for Germany