This paper studies labor market response to immigration by estimating a structural dynamic general equilibrium model of the U.S. labor market and using the estimated model to analyze the effects of alternative immigration policies. The model features a multi-sector economy with heterogenous native and immigrant workers who are imperfect substitutes in production. Labor supply is endogenous and workers self-select into their sectors of employment subject to costly mobility. The model is fit to the Current Population Survey. Using the estimated model as a basis for counter-factual experiements, the paper compares the wage and employment dynamics following the implementation of alternative immigration policies and calculates the resulting welfare gains and losses to different types of workers.