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Immigrants in a Booming Economy: Analysing their Earnings and Welfare Dependence

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  • Barrett, Alan

    () (ESRI, Dublin)

  • McCarthy, Yvonne

    () (ESRI, Dublin)

Abstract

Ireland’s exceptional economic growth in recent years has led to an influx of immigrants. Given the favourable economic climate into which these immigrants are arriving, it is interesting to ask how their earnings and welfare dependence compare with the native population. To the extent that strong economic growth produces good labour market opportunities for immigrants, earnings disadvantages may be lessened and any tendency towards welfare dependence may be reduced. Data from a nationally representative sample drawn in 2004 are used to assess the earnings of immigrants in Ireland relative to the native population and also the rate of welfare receipt across the two groups. Immigrants are found to earn 18 percent less than natives, controlling for education and years of work experience. However, this single figure hides differences across immigrants from English-speaking and non-English speaking countries. We also find evidence of a wage gap for immigrants with third level educations, relative to comparable natives. On average, immigrants are half as likely to have been in receipt of social welfare payments in the previous twelve months relative to natives. A difference in welfare participation remains when we control for the higher education attainment of immigrants.

Suggested Citation

  • Barrett, Alan & McCarthy, Yvonne, 2006. "Immigrants in a Booming Economy: Analysing their Earnings and Welfare Dependence," IZA Discussion Papers 2457, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2457
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    References listed on IDEAS

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    1. Richard Blundell & Howard Reed & Thomas M. Stoker, 2003. "Interpreting Aggregate Wage Growth: The Role of Labor Market Participation," American Economic Review, American Economic Association, vol. 93(4), pages 1114-1131, September.
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    Cited by:

    1. Christian Dustmann & Tommaso Frattini & Caroline Halls, 2010. "Assessing the Fiscal Costs and Benefits of A8 Migration to the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 31(1), pages 1-41, March.
    2. Barrett, Alan & Bergin, Adele & Kelly, Elish, 2009. "Estimating the Impact of Immigration on Wages in Ireland," Papers WP318, Economic and Social Research Institute (ESRI).
    3. repec:esr:resser:bkmnext176 is not listed on IDEAS
    4. Ray Barrell & John Fitzgerald & Rebecca Riley, 2010. "EU Enlargement and Migration: Assessing the Macroeconomic Impacts," Journal of Common Market Studies, Wiley Blackwell, vol. 48, pages 373-395, March.
    5. Paul Kilgarriff & Cathal O’Donoghue & Martin Charlton & Ronan Foley, 2016. "Intertemporal Income in Ireland 1996-2011 – A Spatial Analysis," International Journal of Microsimulation, International Microsimulation Association, vol. 9(2), pages 123-143.
    6. Barrett, Alan & Bergin, Adele & Kelly, Elish & McGuinness, Seamus, 2014. "Ireland's Recession and the Immigrant/Native Earnings Gap," IZA Discussion Papers 8459, Institute for the Study of Labor (IZA).
    7. Sarah Voitchovsky & Bertrand Maitre & Brian Nolan, 2012. "Wage Inequality in Ireland’s “Celtic Tiger” Boom," The Economic and Social Review, Economic and Social Studies, vol. 43(1), pages 99-133.
    8. Sarah Harper, 2013. "Population–Environment Interactions: European Migration, Population Composition and Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(4), pages 525-541, August.
    9. Alan Barrett & Séamus McGuinness & Martin O’Brien & Philip O’Connell, 2013. "Immigrants and Employer-provided Training," Journal of Labor Research, Springer, vol. 34(1), pages 52-78, March.
    10. Mari Kangasniemi & Merja Kauhanen, 2012. "Profiles of Estonian immigrants and their participation in the Finnish welfare system," Chapters,in: Migration Impact Assessment, chapter 12, pages 387-416 Edward Elgar Publishing.
    11. Martin Kahanec & Klaus F. Zimmermann, 2008. "Migration in an Enlarged EU: A Challenging Solution?," Discussion Papers of DIW Berlin 849, DIW Berlin, German Institute for Economic Research.
    12. McGinnity F & Russell H, 2011. "Workplace Equality in the Recession? The Incidence and Impact of Equality Policies and Flexible Working," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT200.
    13. Peter Huber & Doris A. Oberdabernig, 2016. "Decomposing Welfare Wedges: An Analysis of Welfare Dependence of Immigrants and Natives in Europe," Kyklos, Wiley Blackwell, vol. 69(1), pages 82-107, February.
    14. McGinnity, Fran & Russell, Helen & Watson, Dorothy & Kingston, Gillian & Kelly, Elish, 2014. "Winners and Losers? The Equality Impact of the Great Recession in Ireland," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT265.
    15. Andersen, Torben M. & Migali, Silvia, 2016. "Migrant Workers and the Welfare State," IZA Discussion Papers 9940, Institute for the Study of Labor (IZA).
    16. Smyth, Emer & Darmody, Merike & McGinnity, Frances & Byrne, Delma, 2009. "Adapting to Diversity: Irish Schools and Newcomer Students," Research Series, Economic and Social Research Institute (ESRI), number RS8.
    17. Francesca D'Auria & Kieran Mc Morrow & Karl Pichelmann, 2008. "Economic impact of migration flows following the 2004 EU enlargement process - A model based analysis," European Economy - Economic Papers 2008 - 2015 349, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    18. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Seppo Honkapohja & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2007. "Chapter 2: Macroeonomic adjustment in the euro area - the cases of Ireland and Italy," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 59-72, February.
    19. Cécily Defoort & Carine Drapier, 2012. "Immigration and its dependence on the welfare system: the case of France," Working Papers hal-00995293, HAL.
    20. repec:iza:izawol:journl:2018:n:410 is not listed on IDEAS
    21. Michele Pellizzari, 2013. "The use of welfare by migrants in Italy," International Journal of Manpower, Emerald Group Publishing, vol. 34(2), pages 155-166, May.
    22. Kevin Denny & Cormac Ó Gráda, 2016. "Immigration, Asylum, and Gender: Ireland and Beyond," Working Papers 201604, School of Economics, University College Dublin.
    23. Kaczmarczyk, Pawel & Tyrowicz, Joanna, 2015. "Winners and Losers among Skilled Migrants: The Case of Post-Accession Polish Migrants to the UK," IZA Discussion Papers 9057, Institute for the Study of Labor (IZA).
    24. Alan Barrett & Eilish Kelly, 2008. "How Reliable is the Quarterly National Household Survey for Migration Research?," The Economic and Social Review, Economic and Social Studies, vol. 39(3), pages 191-205.
    25. repec:esr:resser:bkmnext213 is not listed on IDEAS

    More about this item

    Keywords

    immigrants’ welfare participation; immigrants’ earnings; Ireland;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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