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The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain

Author

Listed:
  • Marco Manacorda
  • Alan Manning
  • Jonathan Wadsworth
Abstract
Immigration to the UK has risen in the past 10 years and has had a measurable effect on the supply of different types of labour. But, existing studies of the impact of immigration on the wages of native-born workers in the UK (e.g. Dustmann, Fabbri and Preston, 2005) have failed to find any significant effect. This is something of a puzzle since Card and Lemieux, (2001) have shown that changes in the relative supply of educated natives do seem to have measurable effects on the wage structure. This paper offers a resolution of this puzzle - natives and immigrants are imperfect substitutes, so that an increase in immigration reduces the wages of immigrants relative to natives. We show this using a pooled time series of British cross-sectional micro data of observations on male wages and employment from the mid-1970s to the mid-2000s. This lack of substitution also means that there is little discernable effect of increased immigration on the wages of native-born workers.

Suggested Citation

  • Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2006. "The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain," CEP Discussion Papers dp0754, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0754
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    References listed on IDEAS

    as
    1. John DiNardo & David Card, 2000. "Do Immigrant Inflows Lead to Native Outflows?," American Economic Review, American Economic Association, vol. 90(2), pages 360-367, May.
    2. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 35-78.
    3. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    4. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 705-746.
    5. Borjas, George J & Freeman, Richard B & Katz, Lawrence, 1996. "Searching for the Effect of Immigration on the Labor Market," American Economic Review, American Economic Association, vol. 86(2), pages 246-251, May.
    6. David Card, 2005. "Is the New Immigration Really so Bad?," Economic Journal, Royal Economic Society, vol. 115(507), pages 300-323, November.
    7. 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.
    8. Bell, Brian D, 1997. "The Performance of Immigrants in the United Kingdom: Evidence from the GHS," Economic Journal, Royal Economic Society, vol. 107(441), pages 333-344, March.
    9. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, July.
    10. John Schmitt & Jonathan Wadsworth, 2006. "Changing Patterns in the Relative Economic Performance of Immigrants to Great Britain and the U.S., 1980-2000," CEPR Reports and Issue Briefs 2006-07, Center for Economic and Policy Research (CEPR).
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    12. Gianmarco I.P. Ottaviano & Giovanni Peri, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," NBER Working Papers 11672, National Bureau of Economic Research, Inc.
    13. George J. Borjas, 2021. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 9, pages 235-274, World Scientific Publishing Co. Pte. Ltd..
    14. Robert J. LaLonde & Robert H. Topel, 1991. "Labor Market Adjustments to Increased Immigration," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 167-199, National Bureau of Economic Research, Inc.
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    17. Christian Dustmann & Francesca Fabbri & Ian Preston, 2005. "The Impact of Immigration on the UK Labour Market," RF Berlin - CReAM Discussion Paper Series 0501, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
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    More about this item

    Keywords

    Wages; wage inequality; immigration;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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