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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. Røed, Marianne & Schøne, Pål, 2012. "Does immigration increase labour market flexibility?," Labour Economics, Elsevier, vol. 19(4), pages 527-540.
  2. Peri, Giovanni & Sparber, Chad, 2010. "Highly-Educated Immigrants and Native Occupational Choice," Working Papers 2010-09, Department of Economics, Colgate University.
  3. 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.
  4. Nicodemo, Catia & Nicolini, Rosella, 2012. "Random or Referral Hiring: When Social Connections Matter," IZA Discussion Papers 6312, Institute for the Study of Labor (IZA).
  5. Vikhrov Dmytro, 2013. "Welfare Effects of Labor Migration," CERGE-EI Working Papers wp491, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  6. Anthony Edo, 2013. "The Impact of Immigration on Native Wages and Employment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00881131, HAL.
  7. Bernt Bratsberg & Oddbjørn Raaum & Marianne Røed & Pål Schøne, 2010. "Immigration Wage Impacts by Origin," CReAM Discussion Paper Series 1030, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Anthony Edo, 2013. "The Impact of Immigration on Native Wages and Employment," Documents de travail du Centre d'Economie de la Sorbonne 13064, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

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