Immigration and Wages: Evidence from Construction

29 Pages Posted: 13 Nov 2012

See all articles by Bernt Bratsberg

Bernt Bratsberg

Kansas State University - Department of Economics; University of Oslo - Ragnar Frisch Centre for Economic Research

Oddbjorn Raaum

University of Oslo - Ragnar Frisch Centre for Economic Research

Date Written: December 2012

Abstract

To identify wage impacts of immigration, we use licensing requirements in the Norwegian construction sector that give rise to exogenous variation in immigrant employment across trades. Individual panel data reveal lower wage growth in trades with rising immigrant employment shares, with a 10% increase in immigration predicted to reduce wages by 0.6%. Selective attrition masks the causal wage impact if neglected. For low and semi‐skilled workers, wage effects are comparable for natives and older immigrant cohorts, consistent with perfect substitutability between native and immigrant labour within trade. Price data indicate that wage and cost reductions are passed on to consumers.

Suggested Citation

Bratsberg, Bernt and Raaum, Oddbjørn, Immigration and Wages: Evidence from Construction (December 2012). The Economic Journal, Vol. 122, Issue 565, pp. 1177-1205, 2012, Available at SSRN: https://ssrn.com/abstract=2174837 or http://dx.doi.org/10.1111/j.1468-0297.2012.02540.x

Bernt Bratsberg (Contact Author)

Kansas State University - Department of Economics ( email )

Manhattan, KS 66502-4001
United States

University of Oslo - Ragnar Frisch Centre for Economic Research

Gaustadalleen 21
N-0349 Oslo
Norway

Oddbjørn Raaum

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

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