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Residual Wage Inequality and Immigration in the UK and the US

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  • Rienzo, Cinzia

Abstract

Over the last few decades, immigration has increased significantly in both the US and the UK; both countries have also experienced notable increases in the degree of wage inequality. Unlike previous studies, this paper focuses on the effects of immigration on the residual wage inequality in the UK and US between 1994 and 2008. It seeks to assess whether and to what degree immigration contributed, along with technology, institutions and traditional explanations, to widening inequality. To answer these questions, this work reassesses Lemieux’s hypothesis (i.e., composition effects exert an upward mechanical force on the residual wage inequality) by adding the immigration dimension to the original analysis. The empirical analysis reveals that residual wage inequality is higher among immigrants than among natives. However, such differences do not contribute (much) to the increasing residual wage inequality observed in the two countries.

Suggested Citation

  • Rienzo, Cinzia, 2008. "Residual Wage Inequality and Immigration in the UK and the US," MPRA Paper 30279, University Library of Munich, Germany, revised Mar 2011.
    • Handle: RePEc:pra:mprapa:30279
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    References listed on IDEAS

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    More about this item

    Keywords

    wage inequality; immigration; composition effects; residual;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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