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The Impact of Immigration On Occupational Wages: Evidence from Britain

45 Pages Posted: 22 Dec 2015  

Stephen Nickell

University of Oxford - Nuffield College; Bank of England - Monetary Policy Committee

Jumana Saleheen

Bank of England

Multiple version iconThere are 2 versions of this paper

Date Written: December 2015

Abstract

This paper asks whether immigration to Britain has had any impact on average wages. There seems to be a broad consensus among academics that the share of immigrants in the workforce has little or no effect on native wages. These studies typically have not refined their analysis by breaking it down into different occupational groups. Our contribution is to extend the existing literature on immigration to include occupations as well. We find that the immigrant to native ratio has a small negative impact on average British wages. This finding is important for monetary policy makers, who are interested in the impact that supply shocks, such as immigration, have on average wages and overall inflation. Our results also reveal that the biggest impact of immigration on wages is within the semi/unskilled services occupational group. We also investigate if there is any differential impact between immigration from the EU and non-EU, and find that there is no additional impact on aggregate UK wages as a result of migrants arriving specifically from EU countries. These findings accord well with intuition and anecdotal evidence, but have not been recorded previously in the empirical literature.

Keywords: Immigration, occupation, wages

JEL Classification: J6

Suggested Citation

Nickell, Stephen and Saleheen, Jumana, The Impact of Immigration On Occupational Wages: Evidence from Britain (December 2015). Staff Working Paper No. 574. Available at SSRN: https://ssrn.com/abstract=2706493 or http://dx.doi.org/10.2139/ssrn.2706493

Stephen Nickell (Contact Author)

University of Oxford - Nuffield College ( email )

New Road
Oxford, OX1 1NF
United Kingdom

Bank of England - Monetary Policy Committee ( email )

Threadneedle Street
London EC2R 8AH
United Kingdom

Jumana Saleheen

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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