The popular belief that immigrants have a large adverse impact on the wages and employment opportunities of the native-born population of the receiving country is not supported by the empirical evidence. A 10 percent increase in the fraction of immigrants in the population reduces native wages by 0-1 percent. Even those natives who are the closest substitutes with immigrant labor do not suffer significantly as a result of increased immigration. There is no evidence of economically significant reductions in native employment. The impact on natives' per capita income growth depends crucially on the immigrants' human capital levels.

We measure the extent to which skilled immigrants increase innovation in the United States. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, due to their disproportionately holding science and engineering degrees. Using a 1940-2000 state panel, we show that a 1 percentage point increase in immigrant college graduates' population share increases patents per capita by 9-18 percent. Our instrument for the change in the skilled immigrant share is based on the 1940 distribution across states of immigrants from various source regions and the subsequent national increase in skilled immigration from these regions. (JEL J24, J61, O31, O33)

Germany experienced an even deeper fall in GDP in the Great Recession than the United States with little employment loss. Employers' reticence to hire in the preceding expansion -associated in part with a lack of confidence it would last -contributed to an employment shortfall equivalent to 40 percent of the missing employment decline in the recession. Another 20 percent may be explained by wage moderation. A third important element was the widespread adoption of working time accounts, which permit employers to avoid overtime pay if hours per worker average to standard hours over a window. We find that this provided disincentives for employers to lay off workers in the downturn. While the overall cuts in hours per worker were consistent with the severity of the Great Recession, reduction of working time account balances substituted for traditional government-sponsored short time work.

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