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The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain

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Author Info
M Manacorda
Alan Manning
Jonathan Wadsworth

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Abstract

Immigration to the UK has risen in the past 10 years and has had a measurable effect on thesupply of different types of labour. But, existing studies of the impact of immigration on thewages of native-born workers in the UK (e.g. Dustmann, Fabbri and Preston, 2005) have failedto find any significant effect. This is something of a puzzle since Card and Lemieux, (2001) haveshown that changes in the relative supply of educated natives do seem to have measurable effectson the wage structure. This paper offers a resolution of this puzzle - natives and immigrants areimperfect substitutes, so that an increase in immigration reduces the wages of immigrantsrelative to natives. We show this using a pooled time series of British cross-sectional micro dataof observations on male wages and employment from the mid-1970s to the mid-2000s. This lackof substitution also means that there is little discernable effect of increased immigration on thewages of native-born workers.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0754.

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Date of creation: Oct 2006
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Handle: RePEc:cep:cepdps:dp0754

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Keywords: Wages wage inequality immigration

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Find related papers by JEL classification:
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, 07. [Downloadable!] (restricted)
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  2. David Card & John DiNardo, 2000. "Do Immigrant Inflows Lead to Native Outflows?," American Economic Review, American Economic Association, vol. 90(2), pages 360-367, May. [Downloadable!] (restricted)
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  3. Katz, Lawrence F & Murphy, Kevin M, 1992. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 35-78, February. [Downloadable!] (restricted)
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  4. David Card, 2005. "Is the New Immigration Really so Bad?," Economic Journal, Royal Economic Society, vol. 115(507), pages F300-F323, November. [Downloadable!] (restricted)
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  5. Christian Dustmann & Francesca Fabbri & Ian Preston, 2005. "The Impact of Immigration on the UK Labour Market," CReAM Discussion Paper Series 0501, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London. [Downloadable!]
  6. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Christian Dustmann & Francesca Fabbri, 2005. "Immigrants in the British labour market," Fiscal Studies, Institute for Fiscal Studies, vol. 26(4), pages 423-470, December.
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  8. Robert J. LaLonde & Robert H. Topel, 1989. "Labor Market Adjustments to Increased Immigration," University of Chicago - George G. Stigler Center for Study of Economy and State 55, Chicago - Center for Study of Economy and State.
  9. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January. [Downloadable!] (restricted)
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  10. M Arellano & C Meghir, 1990. "Female Labour Supply and On-the-Job Search: An Empirical Model Estimated using Complementary Data Sets," CEP Discussion Papers 09, Centre for Economic Performance, LSE.
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  11. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier. [Downloadable!] (restricted)
  12. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," NBER Working Papers 3069, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Borjas, George J & Freeman, Richard B & Katz, Lawrence, 1996. "Searching for the Effect of Immigration on the Labor Market," American Economic Review, American Economic Association, vol. 86(2), pages 246-51, May. [Downloadable!] (restricted)
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  14. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Catalina Amuedo-Dorantes & Sara de la Rica, 2008. "Does Immigration Raise Natives’ Income? National and Regional Evidence from Spain," DFAEII Working Papers 200807, University of the Basque Country - Department of Foundations of Economic Analysis II. [Downloadable!]
  2. repec:ese:iserwp: is not listed on IDEAS
  3. Amuedo-Dorantes, Catalina & de la Rica, Sara, 2008. "Does Immigration Raise Natives’ Income? National and Regional Evidence from Spain," IZA Discussion Papers 3486, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Giovanni Peri & Chad Sparber, 2007. "Task Specialization, Comparative Advantages, and the Effects of Immigration on Wages," NBER Working Papers 13389, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Catalina Amuedo-Dorantes & Sara de la Rica, 2008. "Does Immigration Raise Natives’ Income? National and Regional Evidence from Spain," Working Papers 2008-17, FEDEA. [Downloadable!]
  6. Gabriel J. Felbermayr & Wido Geis & Wilhelm Kohler, 2008. "Restrictive Immigration Policy in Germany: Pains and Gains Foregone?," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  7. David R. Howell, 2007. "Do Surges in Less-Skilled Immigration Have Important Wage Effects? A Review of the U.S. Evidence," Working Papers wp128, Political Economy Research Institute, University of Massachusetts at Amherst. [Downloadable!]
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  8. Christian Dustmann & Tommaso Frattini & Ian Preston, 2008. "The Effect of Immigration along the Distribution of Wages," CReAM Discussion Paper Series 0803, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London. [Downloadable!]
  9. Michael Rosholm & Marianne Røed & Pål Schøne, 2006. "Are New Work Practices and New Technologies Biased against Immigrant Workers?," IZA Discussion Papers 2135, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Francesco D'Amuri & Gianmarco I.P. Ottaviano & Giovanni Peri, 2008. "The Labor Market Impact of Immigration in Western Germany in the 1990's," NBER Working Papers 13851, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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