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Immigration and the Distribution of Incomes

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  • Francine D. Blau
  • Lawrence M. Kahn

Abstract

We review research on the impact of immigration on income distribution. We discuss routes through which immigration can affect income distribution in the host and source countries, including compositional effects and effects on native incomes. Immigration may affect the composition of skills among the residents of a country. Moreover, immigrants can, by changing relative factor supplies, affect native wage and employment rates and the return to capital. We then provide evidence on the level and recent increases in immigration to OECD countries and on the distribution of native and immigrant educational attainment. We next provide a decomposition of 1979-2009 changes in US wage inequality, highlighting the effects of immigration on workforce composition. We then consider the economic theory of the impact of immigration on income distribution, emphasizing labor market substitution and complementarity between natives and immigrants. Further, by changing job opportunities or child care availability, immigrants can affect family, as well as individual, income distribution. We review research methodologies used to estimate the impact of immigration on the native income distribution. These include the structural approach (estimating substitution and complementarity among factors of production, including capital and labor force groups) as well as the natural experiment approach (seeking exogenous sources of variation in immigration) to studying the labor market. We then discuss evidence on these questions for Austria, Britain, France, Germany, Hong Kong, Israel, Portugal, Spain and the United States, as well as the impact of emigration on source country income distribution.

Suggested Citation

  • Francine D. Blau & Lawrence M. Kahn, 2012. "Immigration and the Distribution of Incomes," NBER Working Papers 18515, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18515 Note: LS
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    Cited by:

    1. Genicot, Garance & Mayda, Anna Maria & Mendola, Mariapia, 2016. "The Impact of Migration on Child Labor: Theory and Evidence from Brazil," IZA Discussion Papers 10444, Institute for the Study of Labor (IZA).
    2. Iturbe-Ormaetxe, Iñigo & Romero, J. Gabriel, 2016. "Financing public goods and attitudes toward immigration," European Journal of Political Economy, Elsevier, vol. 44(C), pages 159-178.
    3. Mayda, Anna Maria & Peri, Giovanni & Steingress, Walter, 2015. "Immigration to the U.S.: A problem for the Republicans or the Democrats?," CEPR Discussion Papers 11001, C.E.P.R. Discussion Papers.
    4. Lewis, Ethan & Peri, Giovanni, 2015. "Immigration and the Economy of Cities and Regions," Handbook of Regional and Urban Economics, Elsevier.
    5. Mette Foged & Giovanni Peri, 2013. "Immigrants' and Native Workers: New Analysis on Longitudinal Data," NBER Working Papers 19315, National Bureau of Economic Research, Inc.
    6. Christoph Basten & Michael Siegenthaler, 2013. "Do immigrants take or create residents' jobs?," KOF Working papers 13-335, KOF Swiss Economic Institute, ETH Zurich.
    7. Uri Dadush, 2015. "Diaspora, Development and Morocco," Research papers & Policy papers 1518, OCP Policy Center.
    8. Andreas Beerli & Giovanni Peri, 2015. "The Labor Market Effects of Opening the Border: New Evidence from Switzerland," NBER Working Papers 21319, National Bureau of Economic Research, Inc.
    9. Giovanni Peri, 2014. "Do immigrant workers depress the wages of native workers?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-42, May.
    10. CHOE Chung & VAN KERM Philippe, 2014. "Foreign workers and the wage distribution: Where do they fit in?," LISER Working Paper Series 2014-02, LISER.
    11. Siegenthaler, Michael & Basten, Christoph, 2013. "Do immigrants take or create residents jobs? Quasi-experimental evidence from Switzerland," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79780, Verein für Socialpolitik / German Economic Association.
    12. repec:eee:jmacro:v:52:y:2017:i:c:p:118-134 is not listed on IDEAS

    More about this item

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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