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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. 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.
  2. Anna Maria Mayda, 2006. "Why are people more pro-trade than pro-migration?," CReAM Discussion Paper Series 0611, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, 08.
  4. Christian Dustmann & Ian Preston, 2000. "Racial and Economic Factors in Attitudes to Immigration," Econometric Society World Congress 2000 Contributed Papers 0839, Econometric Society.
  5. Kristin F. Butcher & Anne Morrison Piehl, 2007. "Why are Immigrants' Incarceration Rates so Low? Evidence on Selective Immigration, Deterrence, and Deportation," NBER Working Papers 13229, 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. Francisco Rivera-Batiz & Myeong-Su Yun & Ira Gang, 2002. "Economic Strain, Ethnic Concentration and Attitudes Towards Foreigners in the European Union," Departmental Working Papers 200214, Rutgers University, Department of Economics.
  8. Kevin H. O'Rourke & R. Sinnott, 2003. "Migration Flows: Political Economy of Migration and the Empirical Challenges," Trinity Economics Papers 20036, Trinity College Dublin, Department of Economics.
  9. 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.
  10. Abowd, John M & Card, David, 1989. "On the Covariance Structure of Earnings and Hours Changes," Econometrica, Econometric Society, vol. 57(2), pages 411-45, March.
  11. Tommaso Frattini, 2012. "Immigrazione," Rivista di Politica Economica, SIPI Spa, issue 3, pages 363-407, July-Sept.
  12. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
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