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Estimating the Effect of Immigration on Wages

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  • Christian Dustmann

    ()
    (University College London and CReAM)

  • Ian Preston

    ()
    (University College London and CReAM)

Abstract

We discuss approaches to estimating the effect that immigration has on wages of native workers which assume a three-level CES model, where immigrants and natives are allowed to be imperfect substitutes within an age-education cell, and predict the wage impact based on estimates of the elasticities of substitution at each level. We argue that this approach is sensitive to immigrants downgrading at arrival, and we illustrate the possible bias in estimating the elasticity of substitution between immigrants and natives.

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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 1121.

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Date of creation: Nov 2011
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Handle: RePEc:crm:wpaper:1121

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  1. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
  2. Tommaso Frattini, 2012. "Immigrazione," Rivista di Politica Economica, SIPI Spa, SIPI Spa, issue 3, pages 363-407, July-Sept.
  3. 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).
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. "British workers hit hard"
    by chris dillow in Stumbling and Mumbling on 2014-04-22 13:28:12

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