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The impact of immigration on the structure of male wages: theory and evidence from Britain

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  • Manacorda, Marco
  • Manning, Alan
  • Wadsworth, Jonathan

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

  • Manacorda, Marco & Manning, Alan & Wadsworth, Jonathan, 2006. "The impact of immigration on the structure of male wages: theory and evidence from Britain," LSE Research Online Documents on Economics 19797, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:19797
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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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