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The Wage Effects of Immigration and Emigration

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  • Frédéric Docquier
  • Çaǧlar Özden
  • Giovanni Peri

Abstract

In this paper, we simulate the long-run effects of migrant flows on wages of high-skilled and low-skilled non-migrants in a set of countries using an aggregate model of national economies. New in this literature we calculate the wage effect of emigration as well as immigration. We focus on Europe and compare the outcomes for large Western European countries with those of other key destination countries both in the OECD and outside the OECD. Our analysis builds on an improved database of bilateral stocks and net migration flows of immigrants and emigrants by education level for the years 1990 through 2000. We find that all European countries experienced a decrease in their average wages and a worsening of their wage inequality because of emigration. Whereas, contrary to the popular belief, immigration had nearly equal but opposite effects: positive on average wages and reducing wage inequality of non-movers. These patterns hold true using a range of parameters for our simulations, accounting for the estimates of undocumented immigrants, and correcting for the quality of schooling and/or labor-market downgrading of skills. In terms of wage outcomes, it follows that prevalent public fears in European countries are misplaced; immigration has had a positive average wage effect on native workers. Some concerns should be focused on the wage effect of emigration, instead.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16646.

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Date of creation: Dec 2010
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Handle: RePEc:nbr:nberwo:16646

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The Wage Effects of Immigration and Emigration
    by Ariel Goldring in Free Market Mojo on 2011-03-04 12:17:07
  2. Productivity vs immigration
    by chris dillow in Stumbling and Mumbling on 2011-04-07 12:58:12
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Alessandra Venturini, 2012. "Methodological Aspects of Research on Flows Human Capital Flows: A survey," RSCAS Working Papers carim2012/01, European University Institute.
  2. Andri Chassamboulli & Theodore Palivos, 2012. "A Search-Equilibrium Approach to the Effects of Immigration on Labor Market Outcomes," University of Cyprus Working Papers in Economics 17-2012, University of Cyprus Department of Economics.
  3. Francesc Ortega & Giovanni Peri, 2012. "The Effect of Trade and Migration on Income," Working Papers 1213, University of California, Davis, Department of Economics.
  4. Moritz Bonn, 2011. "The Effects of High Skilled Immigration in a Dual Labour Market with Union Wage Setting and Fiscal Redistribution," MAGKS Papers on Economics 201121, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  5. Dequiedt, Vianney & Zenou, Yves, 2011. "International Migration, Imperfect Information, and Brain Drain," CEPR Discussion Papers 8459, C.E.P.R. Discussion Papers.
  6. Andrea Caragliu & Peter Nijkamp, 2013. "From Islands to Hubs of Innovation: Connecting Innovative Regions," Tinbergen Institute Discussion Papers 13-141/VIII, Tinbergen Institute.
  7. Ortega, Francesc & Peri, Giovanni, 2014. "Openness and income: The roles of trade and migration," Journal of International Economics, Elsevier, vol. 92(2), pages 231-251.
  8. Giovanni Peri, 2012. "Immigration and Europe’s Demographic Problems: Analysis and Policy Considerations," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 9(4), pages 03-08, 02.
  9. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2013. "Multilateral resistance to migration," Journal of Development Economics, Elsevier, vol. 102(C), pages 79-100.
  10. Francesco D'Amuri & Giovanni Peri, 2011. "Immigration, Jobs and Employment Protection: Evidence from Europe," NBER Working Papers 17139, National Bureau of Economic Research, Inc.
  11. Moritz Bonn, 2011. "High Skilled Immigration Policy and Union Wage Setting," Volkswirtschaftliche Diskussionsbeiträge 147-11, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht, revised 27 Aug 2012.
  12. Michael A. Clemens, 2011. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 83-106, Summer.
  13. E. Podrecca & G. Rossini, 2012. "Wages and international factors’ mobility," Working Papers wp826, Dipartimento Scienze Economiche, Universita' di Bologna.

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