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Native-migrant labour substitution by industry and wage effects: evidence from the UK

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  • Simone Angioloni
  • Ziping Wu

Abstract

Unlike previous studies, we estimate the native-migrant substitution elasticity (NME) differentiated by sector. To do so, we employ a straightforward estimation strategy that consists of adding slope-shifters to the reduced form of the labour demand equation to allow for sectoral differentiation and adjusting the restrictions on the efficiency parameters consequently. Our study contributes to the literature in three ways. First, this is the first example that estimates NME differentiated by industry. Second, previous studies assessed the effect of the past migration on wages. In contrast, we assess the impact of potential restrictions to unskilled EU labour in the UK and this can useful to design future immigration policies in the country. Third, our results contribute to understand the dynamics between migration and the domestic labour market in the UK and provide a lesson for other developed economies.

Suggested Citation

  • Simone Angioloni & Ziping Wu, 2020. "Native-migrant labour substitution by industry and wage effects: evidence from the UK," Applied Economics, Taylor & Francis Journals, vol. 52(42), pages 4639-4658, September.
    • Handle: RePEc:taf:applec:v:52:y:2020:i:42:p:4639-4658
    DOI: 10.1080/00036846.2020.1739613
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    Cited by:

    1. repec:sol:wpaper:2013/373255 is not listed on IDEAS
    2. Valentine Fays & Benoît Mahy & François Ryckx, 2024. "Do migrants displace native-born workers on the labour market? The impact of workers’ origin," LIDAM Discussion Papers IRES 2024004, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Anna D’Ambrosio & Roberto Leombruni & Tiziano Razzolini, 2022. "Trading off wage for workplace safety? Gaps between immigrants and natives in Italy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(3), pages 903-960, October.
    4. Fays, Valentine & Mahy, Benoît & Rycx, François, 2024. "Do Migrants Displace Native-Born Workers on the Labour Market? The Impact of Workers' Origin," IZA Discussion Papers 16887, Institute of Labor Economics (IZA).

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