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The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices

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  • Nathan, Max

Abstract

British cities are becoming more culturally diverse, with migration a main driver. Is this growing diversity good for urban economies? This paper explores, using a new 16-year panel of UK cities. Over time, net migration affects both local labour markets and the wider economy. Average labour market impacts appear neutral. Dynamic effects may be positive on UK-born workers’ productivity and wages (via production complementarities for higher skill workers) or negative on employment (if migrants progressively displace lower-skill natives from specific sectors). The results, which survive causality checks, suggest both processes are operating in British cities. Long-term industrial decline and casualisation of entry-level jobs help explain the employment findings.

Suggested Citation

  • Nathan, Max, 2011. "The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices," MPRA Paper 29465, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:29465
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    References listed on IDEAS

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    Cited by:

    1. Kemeny, Thomas, 2013. "Immigrant diversity and economic development in cities: a critical review," LSE Research Online Documents on Economics 58458, London School of Economics and Political Science, LSE Library.
    2. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute for the Study of Labor (IZA).
    3. Abigail Cooke & Thomas Kemeny, 2016. "Urban Immigrant Diversity and Inclusive Institutions," Working Papers 16-07, Center for Economic Studies, U.S. Census Bureau.
    4. Ron Boschma & Rikard H. Eriksson & Urban Lindgren, 2014. "Labour Market Externalities and Regional Growth in Sweden: The Importance of Labour Mobility between Skill-Related Industries," Regional Studies, Taylor & Francis Journals, vol. 48(10), pages 1669-1690, October.
    5. Böheim, René & Horvath, Thomas & Mayr, Karin, 2014. "Birthplace Diversity and Productivity Spill-overs in Firms," IZA Discussion Papers 8463, Institute for the Study of Labor (IZA).
    6. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    7. Martin Kahanec & Mariola Pytliková, 2017. "The economic impact of east–west migration on the European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(3), pages 407-434, August.
    8. Rosa Sanchis-Guarner, 2014. "First-Come First-Served: Identifying the Demand Effect of Immigration Inflows on House Prices," SERC Discussion Papers 0160, Spatial Economics Research Centre, LSE.
    9. Dirk Dohse & Robert Gold, 2013. "Measuring Cultural Diversity at a Regional Level," WWWforEurope Working Papers series 10, WWWforEurope.
    10. Neil Lee, 2013. "Cultural Diversity, Cities and Innovation: firm Effects or City Effects?," SERC Discussion Papers 0144, Spatial Economics Research Centre, LSE.
    11. Neil Lee & Max Nathan, 2011. "Does Cultural Diversity Help Innovation in Cities: Evidence from London Firms," SERC Discussion Papers 0069, Spatial Economics Research Centre, LSE.
    12. repec:wfo:wstudy:47204 is not listed on IDEAS
    13. Luisa Gagliardi, 2015. "Does skilled migration foster innovative performance? Evidence from British local areas," Papers in Regional Science, Wiley Blackwell, vol. 94(4), pages 773-794, November.
    14. Thomas Kemeny & Abigail Cooke, 2018. "Spillovers from immigrant diversity in cities," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 213-245.
    15. repec:wfo:wstudy:46857 is not listed on IDEAS
    16. Dirk Dohse & Robert Gold, 2014. "Determining the Impact of Cultural Diversity on Regional Economies in Europe," WWWforEurope Working Papers series 58, WWWforEurope.
    17. Nathan, Max, 2011. "The economics of super-diversity: findings from British cities, 2001-2006," LSE Research Online Documents on Economics 33578, London School of Economics and Political Science, LSE Library.
    18. Luisa Alamá-Sabater & Maite Alguacil & Joan Serafí Bernat-Martí, 2014. "Location determinants of migrant inflows: The Spanish case?," Working Papers 2014/07, Economics Department, Universitat Jaume I, Castellón (Spain).
    19. Stephan Brunow & Hanna Brenzel, 2012. "The effect of a culturally diverse labour supply on regional income in the EU," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(4), pages 461-485, November.
    20. Abigail Cooke & Thomas Kemeny, 2016. "Immigrant Diversity and Complex Problem Solving," Working Papers 16-04, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    cities; migration; cultural diversity; labour markets; productivity; urban economics;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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