The Wage Effects of Immigration and Emigration

45 Pages Posted: 20 Apr 2016

See all articles by Frédéric Docquier

Frédéric Docquier

Université catholique de Louvain; CREAM, Centre for Research on Environmental Appraisal & Management, UK; IZA Institute of Labor Economics

Caglar Ozden

World Bank - Research Department

Giovanni Peri

University of California, Davis - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2011

Abstract

Immigrants in Rome or Paris are more visible to the public eye than the Italian or French engineers in Silicon Valley, especially when it comes to the debate on the effects of immigration on the employment and wages of natives in high-income countries. This paper argues that such public fears, especially in European countries are misplaced; instead, more concern should be directed towards emigration. Using a new dataset on migration flows by education levels for the period 1990-2000, the results show the following: First, immigration had zero to small positive long-run effect on the average wages of natives, ranging from zero in Italy to +1.7 percent in Australia. Second, emigration had a mild to significant negative long-run effect ranging from zero for the US to -0.8 percent in the UK. Third, over the period 1990-2000, immigration generally improved the income distribution of European countries while emigration worsened it by increasing the wage gap between the high and low skilled natives. These patterns hold true using a range of parameters for the simulations, accounting for the estimates of undocumented immigrants, and correcting for the quality of schooling and/or labor-market downgrading of skills. All results go counter to the popular beliefs about migration, but they are due to the higher skill intensity of both emigration and immigration relative to non-migrants.

Keywords: Population Policies, Human Migrations & Resettlements, Voluntary and Involuntary Resettlement, International Migration, Labor Markets

Suggested Citation

Docquier, Frédéric and Özden, Çaglar and Peri, Giovanni, The Wage Effects of Immigration and Emigration (February 1, 2011). World Bank Policy Research Working Paper No. 5556. Available at SSRN: https://ssrn.com/abstract=1754349

Frédéric Docquier (Contact Author)

Université catholique de Louvain ( email )

IRES
Place Montesquieu 3
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://https://perso.uclouvain.be/frederic.docquier/

CREAM, Centre for Research on Environmental Appraisal & Management, UK

University of Newcastle
NE1 7RU Newcastle Upon Tyne
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Çaglar Özden

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/cozden

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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