immigration and house prices in the uk this article studies the effect of immigration on house prices in the uk it finds that immigration has a negative effect on house prices and presents evidence that this negative effect is due to the mobility response of the native population natives respond to immigration by moving to different areas and those who leave are at the top of the wage distribution this generates a negative income effect on housing demand and pushes down house prices the negative effect of immigration on house prices is driven by local areas where immigrants have lower education

the effect of immigration along the distribution of wages this paper analyses the effect immigration has on wages of native workers unlike most previous work we estimate wage effects along the distribution of wages we derive a flexible empirical strategy that does not rely on pre allocating immigrants to particular skill groups in our empirical analysis we demonstrate that immigrants downgrade considerably upon arrival as for the effects on native wages we find that immigration depresses wages below the 20th percentile of the wage distribution but leads to slight wage increases in the upper part of the wage distribution the overall wage effect of immigration is slightly positive the positive wage effects we find are although modest too large to be explained by an immigration surplus we suggest alternative explanations based on the idea that immigrants are paid less than the value of what they contribute to production generating therefore a surplus and we assess the magnitude of these effects

time consistent immigration policy under economic and cultural externalities summarydiscussions of immigration policy are typically framed in the context of their economic effects in receiving countries notably labour market and fiscal effects in this paper we characterize immigration policy in a richer model where migrants are also a source of cultural externalities stemming from either preferences or the functioning of formal and informal institutions in receiving countries while in terms of pure economic effects immigrants do not generally have any more incentives than low skilled natives to allow for more immigration in the future this is not the case when accounting for cultural externalities therefore insofar as past immigrants have a voice in affecting future policies a time consistent immigration policy entails back loading as natives attempt at limiting voice of immigrants in the future the economic effects of immigration flows as well as the cultural externality they introduce furthermore natives exploit any pre commitment device to limit immigration flows e g building walls limiting immigrants political rights or accumulating fiscal surpluses

the labor market impact of immigration a quasi experiment exploiting immigrant location rules in germany with the fall of the berlin wall ethnic germans living in eastern europe and the former soviet union were given the opportunity to migrate to germany within 15 years 2 8 million individuals had done so upon arrival these immigrants were exogenously allocated to different regions to ensure an even distribution across the country their inflow can therefore be seen as a quasi experiment of immigration i analyze the effect of these inflows on skill specific employment rates and wages the results indicate a displacement effect of 3 1 unemployed workers for every 10 immigrants that find a job but no effect on relative wages

immigration and house prices under various labour market structures in england and wales this article estimates the impact of immigration on local house prices under various local labour market structures in england and wales typically for the nation as a whole newly arriving immigr

loan pricing under basel ii in an imperfectly competitive banking market abstract the new basel ii accord 2006 established new and revised capital requirements for banks in this paper we analyze and estimate the possible effects of the new rules on the pricing of bank loans we relate to the two approaches for capital requirements internal and standardized and distinguish between retail and corporate customers our loan equation is based on a model of a banking firm facing uncertainty operating in an imperfectly competitive loan market we use israeli economic data and data of a leading israeli bank the main results indicate that high quality corporate and retail customers will enjoy a reduction in loan interest rates in big banks which most probably will adopt the irb approach on the other hand high risk customers will benefit by shifting to small banks that adopt the standardized approach

the effect of emigration from poland on polish wages in this paper we analyse the effect of emigration from poland on polish wages focusing on the 1998 2007 period for poland we use a unique dataset that contains information about household members who are currently living abroad which allows us to develop region specific emigration rates and to estimate the effect of emigration on wages using within region variation our findings show that emigration led to a slight increase in wages for high and medium skilled workers which are the two groups with the largest relative outmigration rates workers at the low end of the skill distribution might have experienced wage decreases

technological change occupational tasks and declining immigrant outcomes implications for earnings and income inequality in canada the earnings and occupational task requirements of immigrants to canada are analyzed the growing education levels of immigrants in the 1990s have not led to a large improvement in earnings as one might expect if growing computerization and the resulting technological change was leading to a rising return to non routine cognitive skills and a greater wage return to university education controlling for education we find a pronounced cross arrival cohort decline in earnings that coincided with cross cohort declines in cognitive occupational task requirements and cross cohort increases in manual occupational task requirements the immigrant earnings outcomes had only a small effect on overall canadian earnings inequality resume changement technique t ches occupationnelles et resultats declinants pour les immigrants implications pour l inegalite des gains et des revenus au canada les auteurs analysent les gains et les prerequis des t ches occupationnelles des immigrants les niveaux d education croissants des immigrants dans les annees 1990 n ont pas entraine une grande amelioration dans les gains comme on aurait pu s y attendre si l informatisation accrue et les changements techniques qui s ensuivent ont entraine un rendement croissant sur des habiletes cognitives non routinieres et un rendement salarial plus grand sur l education universitaire normalisant pour le niveau d education on decouvre un declin entre cohortes dans les gains qui coincide avec un declin dans ce que reclament les t ches en termes d habiletes cognitives et un accroissement de ce que reclament les occupations manuelles l effet de ces changements sur les gains des immigrants n a eu qu un faible impact sur l inegalite des gains au canada

the impact of immigration on the british labour market using data from the british labour force survey this article provides an empirical investigation of the way immigration affects labour market outcomes of native born workers in britain set beside a theoretical discussion of the underlying economic mechanisms we discuss problems arising in empirical estimation and how to address them we show that the overall skill distribution of immigrants is remarkably similar to that of the native born workforce we find no strong evidence that immigration has overall effects on aggregate employment participation unemployment and wages but some differences according to education

immigration regional conditions and crime evidence from an allocation policy in germany after the collapse of the soviet union more than 3 million people with german ancestors immigrated to germany under a special law granting immediate citizenship exploiting the exogenous allocation of ethnic german immigrants by german authorities across regions upon arrival we find that immigration significantly increases crime the crime impact of immigration depends strongly on local labor market conditions with strong impacts in regions with high unemployment similarly we find substantially stronger effects in regions with high preexisting crime levels or large shares of foreigners

the selection of high skilled emigrants we measure selection among high skilled emigrants from germany using predicted earnings migrants to less equal countries are positively selected relative to nonmigrants while migrants to more equal countries are negatively selected consistent with the prediction in borjas 1987 positive selection to less equal countries reflects university quality and grades and negative selection to more equal countries reflects university subject and gender migrants to the united states are highly positively selected and concentrated in stem fields our results highlight the relevance of the borjas model for high skilled individuals when credit constraints and other migration barriers are unlikely to be binding

the labor market consequences of refugee supply shocks summarythe continuing inflow of hundreds of thousands of refugees into many european countries has ignited much political controversy and raised questions that require a fuller understanding of the determinants and consequences of refugee supply shocks this paper revisits four historical refugee shocks to document their labour market impact specifically we examine the influx of marielitos into miami in 1980 the influx of french repatriates and algerian nationals into france at the end of the algerian independence war in 1962 the influx of jewish emigres into israel after the collapse of the soviet union in the early 1990s and the exodus of refugees from the former yugoslavia during the long series of balkan wars between 1991 and 2001 we use a common empirical approach derived from factor demand theory and publicly available data to measure the impact of these shocks despite the differences in the political forces that motivated the various flows and in economic conditions across receiving countries the evidence reveals a common thread that confirms key insights of the canonical model of a competitive labour market exogenous supply shocks adversely affect the labour market opportunities of competing natives in the receiving countries and often have a favorable impact on complementary workers in short refugee flows can have large distributional consequences

immigration and housing rents in american cities is there a local economic impact of immigration immigration pushes up rents and housing values in us destination cities the positive association of rent growth and immigrant inflows is pervasive in time series for all metropolitan areas i use instrumental variables based on a shift share of national levels of immigration into metropolitan areas an immigration inflow equal to 1 of a city s population is associated with increases in average rents and housing values of about 1 the results suggest an economic impact that is an order of magnitude bigger than that found in labor markets

native migrant labour substitution by industry and wage effects evidence from the uk unlike previous studies we estimate the native migrant substitution elasticity nme differentiated by sector to do so we employ a straightforward estimation strategy that consists of adding slo

an introduction to the economics of immigration in oecd countries the share of the foreign born in oecd countries is increasing and this article summarizes economics research on the effects of immigration in those nations four broad topics are addressed labor market issues fiscal questions the political economy of immigration and productivity international trade extreme concerns about deleterious labour market and fiscal impacts following from new immigrants are not found to be warranted however it is also clear that government policies and practices regarding the selection and integration of new migrants affect labour market fiscal and social cultural outcomes policies that are well informed well crafted and well executed beneficially improve population welfare

the impact of immigration on the structure of wages theory and evidence from britain immigration to the uk particularly among more educated workers has risen appreciably over the past 30 years and as such has raised labor supply however studies of the impact of immigration have failed to find any significant effect on the wages of native born workers in the uk this is potentially puzzling since there is evidence that changes in the supply of educated natives have had significant effects on their wages using a pooled time series of british cross sectional micro data on male wages and employment from the mid 1970s to the mid 2000s this paper offers one possible resolution to this puzzle namely that in the uk natives and foreign born workers are imperfect substitutes we show that immigration has primarily reduced the wages of immigrants and in particular of university educated immigrants with little discernable effect on the wages of the native born

comment the elusive search for negative wage impacts of immigration labor demand curves slope down 1 from this statement it is a short leap to the malthusian proposition that an increase in the supply of workers reduces wages so short is the leap in fact that the title of george borjas s 2003 paper the labor demand curve is downward sloping reexamining the impact of immigration on the labor market seems to imply that as a theoretical matter immigration has to lower the wages of natives in a well functioning economy however increases in population do not necessarily cause falling wages the effect depends on the supply of capital on the characteristics of the added workers and on the structure of technology in fact the papers by ottaviano and peri op and manacorda manning and wadsworth mmw in this symposium argue that the impacts of immigration on native workers in the united states and the uk have been very small how can these papers arrive at such different conclusions than borjas 2003 who claimed that us immigration between 1980 and 2000 had lowered average native wages by about 3 and the wages of the least educated natives by 9 there are three crucial differences in the assumptions used by the different authors first borjas 2003 holds capital fixed in contrast op and mmw assume that in the longer run capital adjusts to keep the capital labor ratio on its long run path or equivalently that capital is perfectly elastically supplied as was illustrated in an earlier version of op e g ottaviano and peri 2008 table 8 and acknowledged by borjas and katz 2007 table 1 11 this matters a lot if immigration increases aggregate labor supply by 10 as it did in the united states between 1980 and 2000 and capital is fixed average wages would be expected to fall by about 3 if capital can adjust however the effect on average wages is approximately zero importantly op figure 2 show that the trend in the us capital labor ratio was similar in the 1980 2000 period as in earlier decades this and other evidence including the remarkable inflows of capital

migration unemployment and skill downgrading in this paper we analyze the labor market impacts of immigration under flexible and rigid labor market regimes a general equilibrium framework is developed accounting for skill heterogeneity and labor market frictions where unemployed medium skilled manufacturing workers are downgraded into low skilled service jobs while low skilled service workers might end up unemployed the analytical analysis shows that medium skill immigration decreases low skilled unemployment under the flexible regime indicating a complementarity effect while the rigid regime induces a substitution effect leading to low skilled unemployment moreover it leads to wage polarization in a numerical analysis the economic effects of different migration scenarios are quantified

individual attitudes towards migration a re examination of the evidence recent economic research has highlighted the importance of labor market and welfarestate mechanisms in the explanation of individual attitudes towards immigration by contrast political scientists argue that attitudes are mostly determined by individual cultural values and beliefs this paper takes a fresh look at this debate and contains the following contributions to the literature first we address the problem that unobserved cultural values and beliefs might be correlated with education a potential source of bias in the estimations second we compile a detailed database on the education levels of immigrants and natives and on the degree of fiscal redistribution in european countries third our econometric estimates rely on a simple structural model taking individual heterogeneity with respect to education explicitly into account the structural model enables us to evaluate quantitatively the importance of the labor market and welfare state channels and of other individual factors such as cultural values and beliefs our results show that the labor market and welfare state mechanisms play a significant role in explaining individual attitudes however the quantitative importance of these two mechanisms turns out to be rather limited compared to other individual factors jel classification f22 j61

attenuation bias in measuring the wage impact of immigration although economic theory predicts an inverse relation between relative wages and immigration induced supply shifts it has been difficult to document such effects the weak evidence may be partly due to sampling error in a commonly used measure of the supply shift the immigrant share of the workforce after controlling for permanent factors that determine wages in specific labor markets little variation remains in the immigrant share we find significant sampling error in this measure of supply shifts in canadian and u s census data correcting for the resulting attenuation bias can substantially increase existing estimates of the wage impact of immigration

the impact of immigration why do studies reach such different results we classify the empirical literature on the wage impact of immigration into three groups where studies in the first two groups estimate different relative effects and studies in the third group estimate the total effect of immigration on wages we interpret the estimates obtained from the different approaches through the lens of the canonical model to demonstrate that they are not comparable we then relax two key assumptions in this literature allowing for inelastic and heterogeneous labor supply elasticities of natives and the downgrading of immigrants downgrading occurs when the position of immigrants in the labor market is systematically lower than the position of natives with the same observed education and experience levels downgrading means that immigrants receive lower returns to the same measured skills than natives when these skills are acquired in their country of origin we show that heterogeneous labor supply elasticities if ignored may complicate the interpretation of wage estimates and particularly the interpretation of relative wage effects moreover downgrading may lead to biased estimates in those approaches that estimate relative effects of immigration but not in approaches that estimate total effects we conclude that empirical models that estimate total effects not only answer important policy questions but are also more robust to alternative assumptions than models that estimate relative effects

the impact of mass migration on the israeli labor market mass migration from the former soviet union increased the israeli population by 12 in the first half of the 1990s this exodus was precipitated by the lifting of emigration restrictions in an unstable ussr and by the open immigration policy of israel toward soviet jews who faced more restrictive entry policies elsewhere i use this natural experiment to study the impact of immigration on the labor market outcomes of native israelis ols yields significant reductions in wages and small reductions in employment however ols is biased if the distribution of immigrants across occupations in israel was not exogenous to relative wage and employment conditions i instrument for the entry of russians into an occupation in israel using information on their former occupations in the ussr there is a significant positive correlation between the former presence of the immigrants in an occupation in the ussr and their presence in that occupation in israel but the previous occupational choices of russians abroad were independent of israeli wage and employment growth subsequent to their migration iv estimates indicate that immigration did not have an adverse impact on native israeli labor market outcomes

labor market effects of demographic shifts and migration in oecd countries the labor force of each industrial country is being shaped by three forces ageing education and migration drawing on a new database for the oecd countries and a standard analytical framework this paper focuses on the relative and aggregate effects of these three forces on wages across different skill and age groups over 2000 to 2010 the variation in the age and educational structure of the labor force emerges as the dominant influence on wage changes the impact is uniform and egalitarian in almost all countries the changes in the age and skill structure favor the low skilled and hurt the highly skilled across age groups immigration plays a relatively minor role except in a handful of open countries like australia and canada where it accentuates the wage equalizing impact of ageing and education emigration is the only inegalitarian influence especially in ireland and a few eastern european countries which have seen significant outflows of high skilled labor to western european union countries

does access to foreign markets shape internal migration evidence from brazil this paper investigates how internal migration is affected by brazil s increased integration into the world economy it analyzes the impact of regional differences in access to foreign demand on sector specific bilateral migration rates between the brazilian states for the years 1995 to 2003 using international trade data a foreign market access measure is computed at the sectoral level which is exogenous to domestic migration a higher foreign market access is associated with a higher local labor demand and attracts workers via two potential channels higher wages and new job opportunities results show that both channels play a significant role in internal migration further we find a heterogeneous impact across industries according to their comparative advantage on the world market however the observed impact is driven by the strong reaction of low educated workers to changes in market access this finding is consistent with the fact that brazil is exporting mainly goods that are intensive in unskilled labor

the effect of low skilled immigration on u s prices evidence from cpi data i exploit the large variation across u s cities and through time in the relative size of the low skilled immigrant population to estimate the causal effect of immigration on prices of nontraded goods and services using an instrumental variables strategy i find that at current immigration levels a 10 percent increase in the share of low skilled immigrants in the labor force decreases the price of immigrant intensive services such as housekeeping and gardening by 2 percent wage equations suggest that lower wages are a likely channel through which these effects take place however wage effects are significantly larger for low skilled immigrants than for low skilled natives implying that the two are imperfect substitutes

the effect of immigrant peers in vocational schools abstract this paper provides new evidence on how the presence of immigrant peers in the classroom affects native student achievement the analysis is based on longitudinal administrative data on two cohorts of vocational training students in italy s largest region vocational training institutions provide the ideal setting for studying these effects because they attract not only disproportionately high shares of immigrants but also the lowest ability native students we adopt a value added model and exploit within school variation both within and across cohorts for identification our results show small negative average effects on maths test scores that are larger for low ability native students strongly non linear and only observable in classes with a high top 20 immigrant concentration these outcomes are driven by classes with a high average linguistic distance between immigrants and natives with no apparent additional role played by ethnic diversity

openness and income the roles of trade and migration abstract this paper explores the relationship between openness to trade immigration and income per person across countries to address endogeneity concerns we extend the instrumental variables strategy introduced by frankel and romer 1999 we build predictors of openness to immigration and to trade for each country by using information on bilateral geographical and cultural distance while controlling for country size since geography may affect income through other channels we also control for climate disease environment natural resources and colonial origins most importantly we also account for the roles of institutions and early development our instrumental variables estimates provide evidence of a robust positive effect of openness to immigration on long run income per capita in contrast we are unable to establish an effect of trade openness on income we also show that the effect of migration operates through an increase in total factor productivity which appears to reflect increased diversity in productive skills and to some extent a higher rate of innovation

rank regressions wage distributions and the gender gap in this paper we propose a novel rank based procedure to decompose changes in the gender wage gap into three components changes in the skill distribution changes in the wage structure and improvements in the position of women in a distribution of reference using cps data from 1979 and 1991 we perform the decomposition at each percentile of the wage distribution and show that the results are sensitive to the choice of distribution of reference male versus overall wage distribution we also find that relative wage gains of women may have been a source of increasing wage inequality among men

nonlinear behavior in sealed bid first price auctions the extent to which the behavior of people is consistent with game theoretic principles is investigated in a first price sealed bid auction environment three linear rules of thumb with increasing complexity are used as benchmarks to gauge the accuracy of the constant relative risk aversion model crram in addition the crram is tested against the relaxation of the rational expectation hypothesis existing competitive bidding experiments cannot clearly distinguish between game theoretic models and linear markdown rules on an individual level within the parametric environments studied and reported in the experimental literature game theoretic solutions are linear over the range of private values in which bid functions are estimated in this study agents drew values from non uniform distributions as a result the game theoretic bidding behavior is nonlinear due to the nonlinearity special econometric and numerical techniques are applied to solve the model and obtain the estimates the crram exhibits good fit of the data the pseudo r2 is greater than 0 8 in 90 percent of the subjects the crram is more accurate than the markdown model mm and the simple ad hoc model simam but not as accurate as the sophisticated ad hoc model sop am the data also supports the relaxation of the rational expectation hypothesis and suggests that substantial increases in the predictive power of game theoretic models can be gained from improvements in the theory of belief formation

what can wages and employment tell us about the uk s productivity puzzle as in many european countries labour productivity in the uk has been stagnant since the start of the great recession this article uses individual data on employment and wages to try to understand whether real wage flexibility can help shed light on the uk s productivity puzzle it finds perhaps unsurprisingly that workforce composition cannot explain the reduction in wages and hence productivity that we observe even compared to previous recessions instead real wages have fallen significantly within jobs this time round why one possibility we investigate is that the labour supply in the uk is higher compared to previous recessions

the drivers of income inequality in rich countries rising income inequality has recently come centre stage as a core societal concern for rich countries the diagnosis of the forces driving inequality upwards and their relative importance remains hotly contested notably with respect to the roles of globalization versus technology and of market forces versus institutions and policy choices this survey provides a critical review and synthesis of recent research the focus is on income inequality across the entire distribution rather than only on what has been happening at the very top we pay particular attention to including what has been learned from the analysis of micro data to ensuring that the coverage is not unduly us centric and to analyses of the interrelations between the different drivers of inequality the marked differences in inequality trends across countries and time periods reflect how global economic forces such as globalisation and technological change have interacted with differing national contexts and institutions major analytical challenges stand in the way of a consensus emerging on the relative importance of different drivers in how income inequality has evolved in recent decades

is the new immigration really so bad this article reviews the recent evidence on us immigration focusing on two key questions 1 does immigration reduce the labour market opportunities of less skilled natives 2 have immigrants who arrived after the 1965 immigration reform act been successfully assimilated overall evidence that immigrants have harmed the opportunities of less educated natives is scant on the question of assimilation the success of the us born children of immigrants is a key yardstick by this metric post 1965 immigrants are doing reasonably well even children of the least educated immigrant origin groups have closed most of the education gap with the children of natives

the effect of immigration on public finances the impact of immigration on the public finances is an important influence on public opinion this study aims to provide a thorough conceptual survey pointing out the complexities of a full understanding and the relevance of indirect effects and covering both static perspectives and longer run dynamic issues it considers simple accounting approaches which are relatively neglectful of behavioural responses but also tries to bring out the complexities in the nature of the relationship between immigration and the public exchequer that come with more sophisticated modelling of its economic effects

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

the labour market impact of immigration in the first part of this paper we present a stylized model of the labour market impact of immigra tion we then discuss mechanisms through which an economy can adjust to immigration changes in factor prices output mix and production technology in the second part we explain the problems of empirically estimating how immigration affects labour market outcomes of the resident population and review some strategies to address these we then summarize some recent empirical studies for the uk and other countries we conclude with an outlook on what we believe are important avenues for future research

do immigrant inflows lead to native outflows we use 1980 and 1990 census data for 119 larger metropolitan statistical areas to examine the effect of skill group specific immigrant inflows on the location decisions of natives in the same skill group and on the overall distribution of human capital to control for unobserved skill group specific demand factors our models include lagged mobility flows of natives over the 1970 80 period we also estimate instrumental variables models that use the fraction of mexican immigrants in 1970 to predict skill group specific relative immigrant inflows over the 1980s despite wide variation across cities in the size and relative skill composition of immigrant population changes we find no evidence of selective out migration by natives we conclude that immigrant inflows exert a direct effect on the relative skill composition of cities cities that have received relatively unskilled immigrant flows have experienced proportional rises in the size of their unskilled populations this abstract was borrowed from another version of this item

on the wage growth of immigrants israel 1990 2000 this paper develops a descriptive methodology for the analysis of wage growth of immigrants that is based on human capital theory the sources of the wage growth are 1 the rise of the return to imported human capital 2 the impact of accumulated experience in the host country and 3 the mobility up the occupational ladder in the host country the model implies a nonlinear wage function that includes interactions between imported skills and local wage growth using data on native israelis and immigrants from the former soviet union of israel we estimate wage equations jointly for the two groups we find that upon arrival immigrants receive non return for imported skills in the ten years following arrival wages of highly skilled immigrants grow at 8 percent a year rising prices of skills occupational transitions accumulated experience in israel and an economy wide rise in wages account for 3 4 1 1 1 5 and 1 5 percent each in the long run the return for schooling converges to 0 027 substantially below the 0 069 return for natives we do not reject the hypothesis that the return for experience converges to that of natives and that immigrants receive a higher return for their unmeasured skills we find that there is some downgrading in the occupational distribution of immigrants relative to that of natives moreover the average wages of immigrants approach but do not converge to the wages of comparable natives the main reason for this is the low return to their imported skills jel j24 j31 j60