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The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices

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  • Max Nathan

Abstract

British cities are becoming more culturally diverse, with migration a main driver. Is this growing diversity good for urban economies? This paper explores, using a new 16-year panel of UK cities. Over time, net migration affects both local labour markets and the wider economy. Average labour market impacts appear neutral. Dynamic effects may be positive on UK-born workers' productivity and wages (via production complementarities for higher skill workers) or negative on employment (if migrants progressively displace lower-skill natives from specific sectors). The results, which survive causality checks, suggest both processes are operating in British cities. Long-term industrial decline and casualisation of entry-level jobs help explain the employment findings.

Suggested Citation

  • Max Nathan, 2011. "The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices," SERC Discussion Papers 0067, Spatial Economics Research Centre, LSE.
  • Handle: RePEc:cep:sercdp:0067
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    File URL: http://www.spatialeconomics.ac.uk/textonly/SERC/publications/download/sercdp0067.pdf
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Productivity vs immigration
      by chris dillow in Stumbling and Mumbling on 2011-04-07 17:58:12

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Martin Kahanec & Mariola Pytliková, 2017. "The economic impact of east–west migration on the European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(3), pages 407-434, August.
    2. Nathan, Max, 2011. "The economics of super-diversity: findings from British cities, 2001-2006," LSE Research Online Documents on Economics 33578, London School of Economics and Political Science, LSE Library.
    3. Thomas Kemeny & Abigail Cooke, 2018. "Spillovers from immigrant diversity in cities," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 213-245.
    4. Kemeny, Thomas, 2013. "Immigrant diversity and economic development in cities: a critical review," LSE Research Online Documents on Economics 58458, London School of Economics and Political Science, LSE Library.
    5. Rosa Sanchis-Guarner, 2014. "First-Come First-Served: Identifying the Demand Effect of Immigration Inflows on House Prices," SERC Discussion Papers 0160, Spatial Economics Research Centre, LSE.
    6. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute of Labor Economics (IZA).
    7. René Böheim & Thomas Horvath & Karin Mayr, 2014. "Birthplace diversity and productivity spill-overs in firms," NRN working papers 2014-10, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    8. Eriksson, Rikard & Rodr�guez-Pose, Andr�s, 2017. "Job-related Mobility and Plant Performance in Sweden," CEPR Discussion Papers 12018, C.E.P.R. Discussion Papers.
    9. Tom Kemeny & Abigail Cooke, 2017. "Urban Immigrant Diversity and Inclusive Institutions," Economic Geography, Taylor & Francis Journals, vol. 93(3), pages 267-291, May.
    10. Dr Max Nathan, 2013. "The wider economic impacts of high-skilled migrants: a survey of the literature," National Institute of Economic and Social Research (NIESR) Discussion Papers 413, National Institute of Economic and Social Research.
    11. Silje Haus-Reve & Abigail Cooke, 2019. "Do regional social capital and trust matter for immigrant diversity and wages?," Papers in Evolutionary Economic Geography (PEEG) 1932, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2019.
    12. Lee, Neil & Nathan, Max, 2011. "Does cultural diversity help innovation in cities: evidence from London firms," LSE Research Online Documents on Economics 33579, London School of Economics and Political Science, LSE Library.
    13. Luisa Alamá-Sabater & Maite Alguacil & Joan Serafí Bernat-Martí, 2014. "Location determinants of migrant inflows: The Spanish case?," Working Papers 2014/07, Economics Department, Universitat Jaume I, Castellón (Spain).
    14. Stephan Brunow & Hanna Brenzel, 2012. "The effect of a culturally diverse labour supply on regional income in the EU," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(4), pages 461-485, November.
    15. Abigail Cooke & Thomas Kemeny, 2016. "Immigrant Diversity and Complex Problem Solving," Working Papers 16-04, Center for Economic Studies, U.S. Census Bureau.
    16. Ron Boschma & Rikard H. Eriksson & Urban Lindgren, 2014. "Labour Market Externalities and Regional Growth in Sweden: The Importance of Labour Mobility between Skill-Related Industries," Regional Studies, Taylor & Francis Journals, vol. 48(10), pages 1669-1690, October.
    17. Neil Lee, 2013. "Cultural Diversity, Cities and Innovation: firm Effects or City Effects?," SERC Discussion Papers 0144, Spatial Economics Research Centre, LSE.
    18. Montalvo, Jose G & Reynal-Querol, Marta, 2017. "Ethnic Diversity and Growth: Revisiting the Evidence," CEPR Discussion Papers 12400, C.E.P.R. Discussion Papers.
    19. Luisa Gagliardi, 2015. "Does skilled migration foster innovative performance? Evidence from British local areas," Papers in Regional Science, Wiley Blackwell, vol. 94(4), pages 773-794, November.
    20. Bernard Fingleton & Daniel Olner & Gwilym Pryce, 2020. "Estimating the local employment impacts of immigration: A dynamic spatial panel model," Urban Studies, Urban Studies Journal Limited, vol. 57(13), pages 2646-2662, October.
    21. Dirk Dohse & Robert Gold, 2014. "Determining the Impact of Cultural Diversity on Regional Economies in Europe. WWWforEurope Working Paper No. 58," WIFO Studies, WIFO, number 47204.
    22. Dirk Dohse & Robert Gold, 2013. "Measuring Cultural Diversity at a Regional Level. WWWforEurope Working Paper No. 10," WIFO Studies, WIFO, number 46857.
    23. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    24. Mª Ángeles Caraballo & Eva Mª Buitrago, 2019. "Ethnolinguistic Diversity and Education. A Successful Pairing," Sustainability, MDPI, Open Access Journal, vol. 11(23), pages 1-18, November.

    More about this item

    Keywords

    cities; migration; cultural diversity; labour markets; productivity; urban economics;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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