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Effects of a High-skilled Immigration Policy and Immigrant Occupational Attainment on Domestic Wages Effects

Author

Listed:
  • Sholeh Maani

    () (The University of Auckland)

  • Y. Chen

    (The University of Auckland)

Abstract

The recent international literature on immigration wage effects has shown contrasting results. Past studies have focussed on the effect of low skilled immigrants on native-born workers in the US, and have yielded results ranging from no impact to negative impacts. This paper, by contrast, explores the outcomes of highly skilled immigration on the wages of native born workers in a controlled environment. New Zealand represents a useful case study in this context, as it actively encourages skilled immigration and has exceptionally accurate immigrant data. Our analysis makes use of unit record data and incorporates labour markets across region, skill, and occupation groups. One of our contributions to this literature is to consider occupation and region as separate labour market choices. Furthermore, we separate the traditionally combined groupings of worker skill and occupation, thereby allowing us to study them independently. This approach enables us to realistically examine the downward movement by some immigrants to occupations that require less skill, and it provides greater detail that lends itself to more accurate analysis of potential wage effects. We find that contrary to what may be commonly expected there is no adverse wage impact from skilled immigration on native workers of similar skill. In addition, we find that highly skilled immigration has a small negative wage effect for low-skilled native workers. We discuss this effect while considering imperfect substitution, immigrant occupational movements, and the importance of auxiliary settlement policies to accompany high-skilled immigration policies.

Suggested Citation

  • Sholeh Maani & Y. Chen, 2012. "Effects of a High-skilled Immigration Policy and Immigrant Occupational Attainment on Domestic Wages Effects," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 15(2), pages 101-121.
  • Handle: RePEc:ozl:journl:v:15:y:2012:i:1:p:101-121
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    Citations

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    Cited by:

    1. Tse, Michael M. H. & Maani, Sholeh A., 2016. "The Labour Market Effect of Immigration: Accounting for Effective Immigrant Work Experience in New Zealand," IZA Discussion Papers 10422, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Geographic Labor Mobility; Immigrant Workers; Occupational Choice; Intergenerational Mobility; Promotion; Wages Compensation and Labor Costs; Human Capital; Labor Productivity;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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