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Immigration and Wages: Evidence from Construction

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  • Bernt Bratsberg
  • Oddbjørn Raaum

Abstract

To identify relative wage impacts of immigration, we make use of licensing requirements in the Norwegian construction sector that give rise to exogenous variation in immigrant employment shares across trades. Individual panel data reveal substantially lower wage growth for workers in trades with rising immigrant employment than for other workers. Selective attrition from the sector masks the causal wage impact unless accounted for by individual fixed effects. For low and semi-skilled workers, effects of new immigration are comparable for natives and older immigrant cohorts, consistent with perfect substitutability between native and immigrant labor within trade. Finally, we present evidence that immigration reduces price inflation, as price increases over the sample period were significantly lower in activities with growth in the immigrant share than in activities with no or small change in immigrant employment.

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File URL: http://hdl.handle.net/10.1111/j.1468-0297.2012.02540.x
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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 122 (2012)
Issue (Month): 565 (December)
Pages: 1177-1205

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Handle: RePEc:ecj:econjl:v:122:y:2012:i:565:p:1177-1205

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References

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Citations

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Cited by:
  1. Bernt Bratsberg & Oddbjørn Raaum & Marianne Røed & Pål Schøne, 2010. "Immigration Wage Impacts by Origin," Norface Discussion Paper Series 2010002, Norface Research Programme on Migration, Department of Economics, University College London.
  2. Sara Cools & Jon H. Fiva & Lars J. Kirkebøen, 2011. "Causal Effects of Paternity Leave on Children and Parents," CESifo Working Paper Series 3513, CESifo Group Munich.
  3. Nicodemo, Catia & Nicolini, Rosella, 2012. "Random or Referral Hiring: When Social Connections Matter," IZA Discussion Papers 6312, Institute for the Study of Labor (IZA).
  4. Peri, Giovanni & Sparber, Chad, 2010. "Highly-Educated Immigrants and Native Occupational Choice," Working Papers 2010-09, Department of Economics, Colgate University.

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