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The Impact of Immigration on the Structure of Wages: Theory and Evidence from Britain

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  • Manacorda, Marco
  • Manning, Alan
  • Wadsworth, Jonathan

Abstract

Immigration to the UK, particularly among more educated workers, has risen appreciably over the past 30 years and as such has raised labor supply. However studies of the impact of immigration have failed to find any significant effect on the wages of native-born workers in the UK. This is potentially puzzling since there is evidence that changes in the supply of educated natives have significant effects on their wages. Using a pooled time series of British crosssectional micro data on male wages and employment from the mid-1970s to the mid-2000s, this paper offers a resolution to this puzzle, namely that in the UK natives and foreign born workers are imperfect substitutes. We show that immigration has primarily reduced the wages of immigrants - and in particular of university educated immigrants - with little discernable effect on the wages of the native-born.

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  • Manacorda, Marco & Manning, Alan & Wadsworth, Jonathan, 2010. "The Impact of Immigration on the Structure of Wages: Theory and Evidence from Britain," CEPR Discussion Papers 7888, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:7888
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    References listed on IDEAS

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    1. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
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    11. Gianmarco I.P. Ottaviano & Giovanni Peri, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," NBER Working Papers 11672, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Immigration; Returns to education; Wages;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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