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

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  • Marco Manacorda

    ()
    (Department of Economics, QMUL - CEP, LSE and CEPR)

  • Alan Manning

    ()
    (Department of Economics, LSE - CEP, LSE)

  • Jonathan Wadsworth

    (Department of Economics, RHUL - CEP, LSE and IZA)

Abstract

Immigration to the UK has risen over time. Existing studies of the impact of immigration on the wages of native-born workers in the UK have failed to find any significant effect. This is something of a puzzle since Card and Lemieux, (2001) have shown that changes in the relative supply of educated natives do seem to have measurable effects on the wage structure. This paper offers a resolution of this puzzle - natives and immigrants are imperfect substitutes, so that an increase in immigration reduces the wages of immigrants relative to natives. We show this using a pooled time series of British cross-sectional micro data of observations on male wages and employment from the mid-1970s to the mid-2000s. This lack of substitution also means that there is little discernable effect of increased immigration on the wages of native-born workers, but that the only sizeable effect of increased immigration is on the wages of those immigrants who are already here.

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Bibliographic Info

Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 0608.

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Date of creation: Aug 2006
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Handle: RePEc:crm:wpaper:0608

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Keywords: Wages; Wage Inequality; Immigration;

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  1. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," Working Papers 633, Princeton University, Department of Economics, Industrial Relations Section..
  2. Arellano, Manuel & Meghir, Costas, 1992. "Female Labour Supply and On-the-Job Search: An Empirical Model Estimated Using Complementary Data Sets," Review of Economic Studies, Wiley Blackwell, vol. 59(3), pages 537-59, July.
  3. 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.
  4. Ottaviano, Gianmarco Ireo Paolo & Peri, Giovanni, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the US," CEPR Discussion Papers 5226, C.E.P.R. Discussion Papers.
  5. David Card, 1996. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Working Papers 747, Princeton University, Department of Economics, Industrial Relations Section..
  6. 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).
  7. Lawrence F. Katz & Kevin M. Murphy, 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," NBER Working Papers 3927, National Bureau of Economic Research, Inc.
  8. Card, David, 2004. "Is the New Immigration Really So Bad?," IZA Discussion Papers 1119, Institute for the Study of Labor (IZA).
  9. John DiNardo & David Card, 2000. "Do Immigrant Inflows Lead to Native Outflows?," American Economic Review, American Economic Association, vol. 90(2), pages 360-367, May.
  10. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain The Rising Return To College For Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 705-746, May.
  11. 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.
  12. 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.
  13. George J. Borjas, 2003. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1335-1374, November.
  14. 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.
  15. Christian Dustmann & Francesca Fabbri, 2005. "Immigrants in the British Labour Market," CReAM Discussion Paper Series 0507, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  16. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, May.
  17. Bell, Brian D, 1997. "The Performance of Immigrants in the United Kingdom: Evidence from the GHS," Economic Journal, Royal Economic Society, vol. 107(441), pages 333-44, March.
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  1. EU and non-EU immigration
    by chris dillow in Stumbling and Mumbling on 2010-04-30 11:23:05
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