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

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  • Manacorda, Marco
  • Manning, Alan
  • Wadsworth, Jonathan

Abstract

Immigration to the UK, particularly among more educated workers, has risen appreciably over the past 30 years and as such has raised labor supply. However studies of the impact of immigration have failed to find any significant effect on the wages of native-born workers in the UK. This is potentially puzzling since there is evidence that changes in the supply of educated natives have significant effects on their wages. Using a pooled time series of British crosssectional micro data on male wages and employment from the mid-1970s to the mid-2000s, this paper offers a resolution to this puzzle, namely that in the UK natives and foreign born workers are imperfect substitutes. We show that immigration has primarily reduced the wages of immigrants - and in particular of university educated immigrants - with little discernable effect on the wages of the native-born.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7888.

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Date of creation: Jun 2010
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Handle: RePEc:cpr:ceprdp:7888

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Keywords: Immigration; Returns to education; Wages;

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References

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  1. Dustmann, Christian & Fabbri, Francesca, 2000. "Language Proficiency and Labour Market Performance of Immigrants in the UK," IZA Discussion Papers 156, Institute for the Study of Labor (IZA).
  2. Christian Dustmann & Francesca Fabbri, 2005. "Immigrants in the British labour market," Fiscal Studies, Institute for Fiscal Studies, vol. 26(4), pages 423-470, December.
  3. Fitzenberger, Bernd & Kohn, Karsten, 2006. "Skill Wage Premia, Employment, and Cohort Effects: Are Workers in Germany All of the Same Type?," IZA Discussion Papers 2185, Institute for the Study of Labor (IZA).
  4. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The Labour Market Impact of Immigration," CReAM Discussion Paper Series 0811, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  5. John Schmitt & Jonathan Wadsworth, 2007. "Changes in the Relative Economic Performance of Immigrants to Great Britain and the United States, 1980-2000," British Journal of Industrial Relations, London School of Economics, vol. 45(4), pages 659-686, December.
  6. Abdurrahman Aydemir & George J. Borjas, 2011. "Attenuation Bias in Measuring the Wage Impact of Immigration," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 69-113, 01.
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Citations

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Cited by:
  1. Rienzo, Cinzia, 2008. "Residual Wage Inequality and Immigration in the UK and the US," MPRA Paper 30279, University Library of Munich, Germany, revised Mar 2011.
  2. Sebastian Braun & Toman Omar Mahmoud, 2011. "The Employment Effects of Immigration: Evidence from the Mass Arrival of German Expellees in Post-war Germany," Kiel Working Papers 1725, Kiel Institute for the World Economy.
  3. 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.
  4. Frédéric DOCQUIER & Joël MACHADO & Khalid SEKKAT, 2012. "Efficiency gains from liberalizing labor mobility," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. David Card, 2009. "Immigration and Inequality," NBER Working Papers 14683, National Bureau of Economic Research, Inc.
  6. Alex Bryson & Simmons, R. & Rossi, G., 2012. "Why Are Migrants Paid More?," NIESR Discussion Papers 388, National Institute of Economic and Social Research.
  7. Adriano Paggiaro, 2013. "How do immigrants fare during the downturn? Evidence from matching comparable natives," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 28(8), pages 229-258, February.
  8. Georgios Papadopoulos, 2013. "Immigration Status and Criminal Behavior," University of East Anglia Applied and Financial Economics Working Paper Series 037, School of Economics, University of East Anglia, Norwich, UK..
  9. Ortega, Francesc & Peri, Giovanni, 2013. "Migration, Trade and Income," IZA Discussion Papers 7325, Institute for the Study of Labor (IZA).
  10. Akay, Alpaslan & Constant, Amelie F. & Giulietti, Corrado, 2012. "The Impact of Immigration on the Well-Being of Natives," IZA Discussion Papers 6630, Institute for the Study of Labor (IZA).
  11. Jérôme Héricourt & Gilles Spielvogel, 2012. "How beliefs about the impact of immigration shape policy preferences: Evidence from Europe," Working Papers DT/2012/06, DIAL (Développement, Institutions et Mondialisation).

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