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Estimating the Effect of Immigration on Wages

Author

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  • Christian Dustmann

    (University College London and CReAM)

  • Ian Preston

    (University College London and CReAM)

Abstract

We discuss approaches to estimating the effect that immigration has on wages of native workers which assume a three-level CES model, where immigrants and natives are allowed to be imperfect substitutes within an age-education cell, and predict the wage impact based on estimates of the elasticities of substitution at each level. We argue that this approach is sensitive to immigrants downgrading at arrival, and we illustrate the possible bias in estimating the elasticity of substitution between immigrants and natives.

Suggested Citation

  • Christian Dustmann & Ian Preston, 2011. "Estimating the Effect of Immigration on Wages," RF Berlin - CReAM Discussion Paper Series 1121, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    • Handle: RePEc:crm:wpaper:1121
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    References listed on IDEAS

    as
    1. 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.
    2. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    3. 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.
    4. Tommaso Frattini, 2012. "Immigrazione," Rivista di Politica Economica, SIPI Spa, issue 3, pages 363-407, July-Sept.
    5. 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..
    6. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1992. "On the Labor Market Effects of Immigration and Trade," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 213-244, National Bureau of Economic Research, Inc.
    7. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The labour market impact of immigration," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(3), pages 478-495, Autumn.
    8. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 2021. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 8, pages 163-234, World Scientific Publishing Co. Pte. Ltd..
    9. Abowd, John M. & Freeman, Richard B. (ed.), 1991. "Immigration, Trade, and the Labor Market," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226000954, August.
    10. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(1), pages 145-173.
    11. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
    12. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1.
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    Blog mentions

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    1. "British workers hit hard"
      by chris dillow in Stumbling and Mumbling on 2014-04-22 18:28:12

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    Cited by:

    1. Battiston, Diego, 2013. "The impact of immigration on the labour market: Evidence from 20 years of cross-border migration to Argentina," MPRA Paper 52424, University Library of Munich, Germany.
    2. Falco, Chiara & Rotondi, Valentina, 2016. "The Less Extreme, the More You Leave: Radical Islam and Willingness to Migrate," World Development, Elsevier, vol. 88(C), pages 122-133.
    3. Aleksandra Vasilyeva & Aleksandr Tarasyev, 2012. "Dynamic multiregional model of labour migration: construction and realization," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 149-157.
    4. Aleksandra Vasilyeva & Aleksandr Tarasyev, 2014. "Future Development Of Migration Processes And Labour Market In The Regions Of Russia," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 283-298.

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