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Want to make more money? Move to a city teeming with immigrants, say two economists from California and Italy who have linked immigrant labor to robust economies in American cities.

The five cities that have benefited the most are Los Angeles, San Jose, Austin, Houston and Phoenix, all which have seen tremendous increases in their immigrant residents over the past 30 years, say Giovanni Peri from the University of California, Davis, and Gianmarco Ottaviano from the University of Bologna, Italy.

This graph shows the heightened interest by foreign-born scholars in physics, engineering and computer science compared to education and psychology. Click to zoom.

Source: Survey of Earned Doctorates, SESAT 2005, National Science Foundation. Chart by Giovanni Peri, ºÙºÙÊÓƵ

By looking at the data on the 100 largest U.S. cities over the past three decades, the two economists found that for each 1 percent increase in the number of foreign-born workers in a city, American-born workers saw a 0.3 percent increase in real wages.

Sacramento, which is average for growth in immigrant workers among the 100 cities studied, saw an 8 percent growth in immigrant labor from 1970 to 2000. That translates to a 2 percent improvement in real wages for U.S. American-born workers over those three decades due to the immigration effect, Peri says. In 2000, immigrants comprised more than 14 percent of the Sacramento work force.

"Our work shows that cities with more diversity -- more immigrants -- in the work force exhibit higher productivity for the American-born employees," Peri says.

Cities with little or no growth in immigration, such as Cleveland, Buffalo and Pittsburgh, did not benefit from this phenomenon during the same time, according to Peri and Ottaviano's calculations.

They make four major findings:

• The positive effects on U.S. wages stem from immigrants offering education backgrounds and job skills that are complementary to those of native-born Americans.
• Immigrants are increasing the variety of services in cities, making them cheaper for American consumers.
• The immigrant services complement American-born services, which implies a limited competition and little downward pressure for American-born wages.
• The new businesses are attracting more investment in cities, helping the cities' overall economies grow.

"We find no evidence that the American-born workers leave the city, but we do find evidence that they earn higher average wages," Peri said. "The increase in immigrants' share of employment is associated with higher wages as well as employment of U.S.-born workers, overall in the cities with more immigrants."

The economists published some of their conclusions in the January issue of the Journal of Economic Geography and more in a recent working paper for the National Bureau of Economic Research.

For native-born Americans, the effects of living in a city where immigrants are increasing depend on their educational levels, Peri and Ottaviano say. Between 1990 and 2000 in the average U.S. city in which the share of foreign-born workers increased by 5 percent, workers with a high school and college degree gained the most from immigration in the 1990s, with an increase of 1 percent to 1.5 percent of their wages.

Those without a high school degree experienced a wage loss, but smaller than previously calculated, at -1.2 percent of their wages.

The average gain was about 1.1 percent of the initial real wage during that 10-year period in the average city in which the share of foreign-born workers increased by 5 percent, according to the economists' report.

In their study, the two economists looked at the changes in the U.S. Census between 1970 and 2003, when the share of foreign-born workers in the labor pool increased from 5 percent to 11 percent. In 1970, most immigrants to the U.S. came from Italy, Germany and Ireland. Three decades later, the countries contributing the most immigrants are Mexico, China and the Philippines.

A major reason that immigrants are not competing for, and thus not pushing down American-born wages, Peri said, is that most immigrants have either very little or substantial education and skills.

By contrast, the far greatest percent of American-born workers, about 60 percent, have a high school degree and some college. Only 10 percent of American workers have less than a high school diploma, and 30 percent have at least one college degree.

"The U.S. is still able to attract very talented immigrants from across the world," Peri said. Although fewer in numbers relative to the unskilled immigrants, these high-skilled foreign workers make substantial contributions to the American economy and constitute a substantial proportion of America's top educated echelon.

Peri points to statistics from the Survey of Earned Doctorates, issued in 2005 by the National Science Foundation.

In 2003, 35 percent of doctorates awarded in the U.S. were given to foreign-born scholars. In the top 10 U.S. universities for the same year, that percentage was 45 percent.

Those numbers are up from four decades ago. In 1967, 17 percent of all doctorates awarded in the U.S. were given to foreign-born scholars, and 25 percent of the doctorates given at the top 10 universities then were earned by immigrants.

Foreign-born scholars are increasingly concentrating in scientific, mathematical and technological professions.

"As a consequence, they do not harm wages in law, education and the social sciences, where most native-born Americans thrive," Peri says. "Foreign-born engineers and scientists have particularly been interested in working in the U.S. In contrast, U.S.-born employees with doctorates are more likely to specialize in law, education and the social sciences."

Americans also benefit from the low-skilled immigrants who fill jobs such as housekeeping, gardening, eldercare and childcare. In contrast to the U.S., where these services are less costly, in Europe, which has restricted immigration more, such basic services are expensive because the native-born workers can demand more for their work, Peri said.