The Borjas Process

The Borjas Process explains how immigrant workers can, over time, influence the wages and employment of native workers. As immigrants enter the labor market, they may initially compete with native workers for similar jobs, potentially lowering wages. However, immigrants also create demand for goods and services, which can lead to new job opportunities. Over time, the economy adjusts—native workers may gain new skills, or the market shifts to accommodate the increased labor supply—resulting in a new economic equilibrium. In essence, the process describes the dynamic and evolving impact of immigration on native employment and wages in a flexible economy.