Abstract for:

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

Marco  Manacorda,  Alan  Manning,  Jonathan  Wadsworth,  October 2006
Paper No' CEPDP0754: | Full paper

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Keywords: Wages; wage inequality, immigration

JEL Classification: J6

Is hard copy/paper copy available? YES - Paper Copy Still In Print.

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This Paper is published under the following series: CEP Discussion Papers

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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.