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Immigration, Wages, and Compositional Amenities

  • David Card
  • Christian Dustmann
  • Ian Preston

Economists are often puzzled by the stronger public opposition to immigration than trade, since the two policies have similar effects on wages. Unlike trade, however, immigration can alter the composition of the local population, imposing potential externalities on natives. While previous studies have addressed fiscal spillover effects, a broader class of externalities arise because people value the 'compositional amenities' associated with the characteristics of their neighbors and co-workers. In this paper we present a new method for quantifying the relative importance of these amenities in shaping attitudes toward immigration. We use data for 21 countries in the 2002 European Social Survey, which included a series of questions on the economic and social impacts of immigration, as well as on the desirability of increasing or reducing immigrant inflows. We find that individual attitudes toward immigration policy reflect a combination of concerns over conventional economic impacts (i.e., wages and taxes) and compositional amenities, with substantially more weight on the latter. Most of the difference in attitudes toward immigration between more and less educated natives is attributable to heightened concerns over compositional amenities among the less-educated.

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File URL: http://www.nber.org/papers/w15521.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15521.

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Date of creation: Nov 2009
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Publication status: published as David Card & Christian Dustmann & Ian Preston, 2012. "Immigration, Wages, And Compositional Amenities," Journal of the European Economic Association, John Wiley & Sons, Ltd., vol. 10(1), pages 78-119, 02.
Handle: RePEc:nbr:nberwo:15521
Note: LS
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  1. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," NBER Working Papers 13236, National Bureau of Economic Research, Inc.
  2. Kristin F. Butcher & Anne Morrison Piehl, 2006. "Why Are Immigrants' Incarceration Rates So Low? Evidence on Selective Immigration, Deterrence, and Deportation," Departmental Working Papers 200605, Rutgers University, Department of Economics.
  3. Dustmann, Christian & Preston, Ian, 2000. "Racial and Economic Factors in Attitudes to Immigration," CEPR Discussion Papers 2542, C.E.P.R. Discussion Papers.
  4. Mayda, Anna Maria, 2007. "Why Are People More Pro-trade Than Pro-migration?," CEPR Discussion Papers 6351, C.E.P.R. Discussion Papers.
  5. John M. Abowd & David Card, 1986. "On the Covariance Structure of Earnings and Hours Changes," NBER Working Papers 1832, National Bureau of Economic Research, Inc.
  6. Butcher, Kristin F & Card, David, 1991. "Immigration and Wages: Evidence from the 1980's," American Economic Review, American Economic Association, vol. 81(2), pages 292-96, May.
  7. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S95-S126, December.
  8. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
  9. Gang, Ira N. & Rivera-Batiz, Francisco L. & Yun, Myeong-Su, 2002. "Economic Strain, Ethnic Concentration and Attitudes Towards Foreigners in the European Union," IZA Discussion Papers 578, Institute for the Study of Labor (IZA).
  10. Anna Maria Mayda (Georgetown University), 2005. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes towards Immigrants," Working Papers gueconwpa~05-05-10, Georgetown University, Department of Economics.
  11. Tommaso Frattini, 2012. "Immigrazione," Rivista di Politica Economica, SIPI Spa, issue 3, pages 363-407, July-Sept.
  12. Kevin H. O'Rourke, & Richard Sinnott, 2003. "Migration flows: Political Economy of Migration and the Empirical Challenges," The Institute for International Integration Studies Discussion Paper Series iiisdp06, IIIS.
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