Migration and Increasing Wage Inequality: Can Imperfect Competition Explain the Link?
AbstractIn this paper, we test two hypotheses as regarding potential effects of domestic and international migration on wage inequality. One related to the possibility of wage competition, and another alternative hypothesis related to fixed set-up costs and indivisibilities for different types of industries within the local labour market. Using detailed information on Swedish local labour markets, derived from Swedish full population data, for 1993 and 2003, a panel model of percent changes in inequality is estimated. Thereby controlling for local level fixed effects as well as other competing explanations, the results suggest that positive net migration may affect income dispersion regardless of possible negative wage competition.
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Bibliographic InfoPaper provided by The Ratio Institute in its series Ratio Working Papers with number 219.
Length: 37 pages
Date of creation: 24 Sep 2013
Date of revision:
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Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Phone: 08-441 59 00
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Income inequality; local labour markets; business diversification; international migration;
Find related papers by JEL classification:
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-11 (All new papers)
- NEP-LAB-2013-10-11 (Labour Economics)
- NEP-LMA-2013-10-11 (Labor Markets - Supply, Demand, & Wages)
- NEP-MIG-2013-10-11 (Economics of Human Migration)
- NEP-URE-2013-10-11 (Urban & Real Estate Economics)
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