The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain

39 Pages Posted: 17 Oct 2006

See all articles by Marco Manacorda

Marco Manacorda

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); Queen Mary, University of London; Centre for Economic Policy Research (CEPR)

Alan Manning

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Jonathan Wadsworth

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); IZA Institute of Labor Economics; William Davidson Institute; Royal Holloway College University of London

Date Written: October 2006

Abstract

Immigration to the UK has risen over time. Existing studies of the impact of immigration on the wages of native-born workers in the UK 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, but that the only sizeable effect of increased immigration is on the wages of those immigrants who are already here.

Keywords: wages, wage inequality, immigration

JEL Classification: J6

Suggested Citation

Manacorda, Marco and Manning, Alan and Wadsworth, Jonathan, The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain (October 2006). IZA Discussion Paper No. 2352. Available at SSRN: https://ssrn.com/abstract=937942

Marco Manacorda (Contact Author)

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

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Queen Mary, University of London

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Alan Manning

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

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(44 20) 7955 6078 (Phone)

Jonathan Wadsworth

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

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London WC2A 2AE
England

IZA Institute of Labor Economics

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William Davidson Institute

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Royal Holloway College University of London

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