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The impact of immigration on the French labor market: Why so different?

Listed author(s):
  • Javier Ortega

    ()

    (City University London)

  • Gregory Verdugo

    ()

    (OFCE - OFCE - Sciences Po, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Combining large (up to 25%) extracts of five French censuses and data from Labor Force Surveys for 1968-1999, we use Borjas (2003)'s factor proportions methodology for France and find that a 10 p.p. increase in the immigrant share raises natives' wages by 3.3%, which is in stark contrast with the results in Borjas (2003) for the U.S. The positive impact of immigration on natives' wages and employment is shown to hold also at the regional level. We find evidence that this positive correlation partly comes from the imperfect substitutability of natives and immigrants within education/experience cells. Specifically, (i) the occupational distribution of natives and immigrants within these cells is more dissimilar when there are more immigrants in the cell; (ii) natives tend to perform more abstract tasks when there are more immigrants in the cell; and (iii) an important part of the positive relation between immigration and wages comes from a reallocation of natives to better-paid occupations within the cells. However, we argue that this positive correlation is also likely to be related to the inability of the Borjas (2003) model to perfectly account for the important changes in the wage distribution and the educational level characterizing the French economy in this period.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-01296787.

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Date of creation: 2014
Publication status: Published in Labour Economics, Elsevier, 2014, 29, pp.14-27. 〈10.1016/j.labeco.2014.05.002〉
Handle: RePEc:hal:cesptp:hal-01296787
DOI: 10.1016/j.labeco.2014.05.002
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01296787
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