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Immigrants in a Booming Economy: Analysing their Earnings and Welfare Dependence

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  • Barrett, Alan

    ()
    (ESRI, Dublin)

  • McCarthy, Yvonne

    ()
    (ESRI, Dublin)

Abstract

Ireland’s exceptional economic growth in recent years has led to an influx of immigrants. Given the favourable economic climate into which these immigrants are arriving, it is interesting to ask how their earnings and welfare dependence compare with the native population. To the extent that strong economic growth produces good labour market opportunities for immigrants, earnings disadvantages may be lessened and any tendency towards welfare dependence may be reduced. Data from a nationally representative sample drawn in 2004 are used to assess the earnings of immigrants in Ireland relative to the native population and also the rate of welfare receipt across the two groups. Immigrants are found to earn 18 percent less than natives, controlling for education and years of work experience. However, this single figure hides differences across immigrants from English-speaking and non-English speaking countries. We also find evidence of a wage gap for immigrants with third level educations, relative to comparable natives. On average, immigrants are half as likely to have been in receipt of social welfare payments in the previous twelve months relative to natives. A difference in welfare participation remains when we control for the higher education attainment of immigrants.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2457.

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Length: 24 pages
Date of creation: Nov 2006
Date of revision:
Publication status: published in: Labour, 2007, 21(4), 789-808
Handle: RePEc:iza:izadps:dp2457

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Keywords: immigrants’ welfare participation; immigrants’ earnings; Ireland;

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Cited by:
  1. Pellizzari, Michele, 2011. "The Use of Welfare by Migrants in Italy," IZA Discussion Papers 5613, Institute for the Study of Labor (IZA).
  2. Barrett, Alan & McGuinness, Seamus & O'Brien, Martin & O'Connell, Philip J., 2009. "Immigrants and Employer-Provided Training," IZA Discussion Papers 4425, Institute for the Study of Labor (IZA).
  3. Francesca D'Auria & Kieran Mc Morrow & Karl Pichelmann, 2008. "Economic impact of migration flows following the 2004 EU enlargement process - A model based analysis," European Economy - Economic Papers 349, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  4. Kahanec, Martin & Zimmermann, Klaus F., 2008. "Migration in an Enlarged EU: A Challenging Solution?," IZA Discussion Papers 3913, Institute for the Study of Labor (IZA).
  5. Smyth, Emer & Darmody, Merike & McGinnity, Frances & Byrne, Delma, 2009. "Adapting to Diversity: Irish Schools and Newcomer Students," Research Series, Economic and Social Research Institute (ESRI), number RS8.
  6. Christian Dustmann & Tommaso Frattini & Caroline Halls, 2009. "Assessing the Fiscal Costs and Benefits of A8 Migration to the UK," CReAM Discussion Paper Series 0918, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  7. Cécily Defoort & Carine Drapier, 2012. "Immigration and its dependence on the welfare system: the case of France," Working Papers hal-00995293, HAL.
  8. Brian Nolan & Bertrand Maitre & Sarah Voitchovsky, 2010. "Earnings Inequality, Institutions and the Macroeconomy – What Can We Learn from Ireland’s Boom Years?," Working Papers 201016, Geary Institute, University College Dublin.
  9. Alan Barrett & Eilish Kelly, 2008. "How Reliable is the Quarterly National Household Survey for Migration Research?," The Economic and Social Review, Economic and Social Studies, vol. 39(3), pages 191-205.
  10. Peter Huber & Doris A. Oberdabernig, 2014. "Decomposing Welfare Wedges. An Analysis of Welfare Dependence of Immigrants and Natives in Europe," WIFO Working Papers 459, WIFO.
  11. McGinnity F & Russell H, 2011. "Workplace Equality in the Recession? The Incidence and Impact of Equality Policies and Flexible Working," Research Series, Economic and Social Research Institute (ESRI), number 200.
  12. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Seppo Honkapohja & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2007. "Chapter 2: Macroeonomic adjustment in the euro area – the cases of Ireland and Italy," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 59-72, 02.

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