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Distributional effects of immigration and imperfect labour markets

Author

Listed:
  • Julian Costas-Fernandez

    (University College London)

  • Simon Lodato

    (Middlesex University London)

Abstract

We present evidence whereby immigration increases labour productivity while reducing the labour share, thus redistributing income from workers to employers. This result is unlikely in competitive markets with skill-neutral capital, where labour share is orthogonal to immigration shocks in the long run. Instead, our empirical evidence better matches predictions from imperfect labour market models where immigrant and native workers are heterogeneous in both skills and labour supply elasticities.

Suggested Citation

  • Julian Costas-Fernandez & Simon Lodato, 2023. "Distributional effects of immigration and imperfect labour markets," RFBerlin Discussion Paper Series 2301, Rockwool Foundation Berlin (RF Berlin).
    • Handle: RePEc:crm:wpaper:2301
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    File URL: https://www.cream-migration.org/publ_uploads/CDP_01_23.pdf
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    References listed on IDEAS

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    Cited by:

    1. Amior, Michael & Stuhler, Jan, 2023. "Immigration, Monopsony and the Distribution of Firm Pay," IZA Discussion Papers 16692, Institute of Labor Economics (IZA).

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    Keywords

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    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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