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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

  • Manacorda, Marco

    ()
    (Queen Mary, University of London)

  • Manning, Alan

    ()
    (London School of Economics)

  • Wadsworth, Jonathan

    ()
    (Royal Holloway, University of London)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2352.

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Length: 39 pages
Date of creation: Oct 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2352

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Keywords: immigration; wage inequality; wages;

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  1. Robert J. LaLonde & Robert H. Topel, 1991. "Labor Market Adjustments to Increased Immigration," NBER Chapters, National Bureau of Economic Research, Inc, in: Immigration, Trade and the Labor Market, pages 167-199 National Bureau of Economic Research, Inc.
  2. Christian Dustmann & Francesca Fabbri, 2005. "Immigrants in the British labour market," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 26(4), pages 423-470, December.
  3. 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.
  4. Giovanni Peri & Gianmarco I.P. Ottaviano, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," Working Papers, University of California, Davis, Department of Economics 58, University of California, Davis, Department of Economics.
  5. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 19(1), pages 22-64, January.
  6. 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, MIT Press, vol. 116(2), pages 705-746, May.
  7. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," NBER Working Papers 3069, National Bureau of Economic Research, Inc.
  8. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
  9. 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, American Economic Association, vol. 86(2), pages 246-51, May.
  10. David Card, 2004. "Is the New Immigration Really So Bad?," CReAM Discussion Paper Series 0402, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  11. Katz, Lawrence F & Murphy, Kevin M, 1992. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(1), pages 35-78, February.
  12. Bell, Brian D, 1997. "The Performance of Immigrants in the United Kingdom: Evidence from the GHS," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(441), pages 333-44, March.
  13. 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.
  14. M Arellano & Costas Megir & Mary Silles, 1990. "Female Labour Supply and On-the-Job Search: An Empirical Model Estimated using Complementary Data Sets," CEP Discussion Papers, Centre for Economic Performance, LSE dp0009, Centre for Economic Performance, LSE.
  15. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, National Bureau of Economic Research, Inc, number abow91-1.
  16. 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).
  17. David Card & John E. DiNardo, 2000. "Do Immigrant Inflows Lead to Native Outflows?," NBER Working Papers 7578, National Bureau of Economic Research, Inc.
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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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