The wage effects of immigration and emigration

Abstract

In this paper, we simulate the long-run effects of migrant flows on wages of high-skilled and low-skilled non-migrants in a set of countries using an aggregate representation of national economies. We focus on Europe and compare the outcomes for large Western European countries with those of other key destination countries both in the OECD and outside the OECD. Our analysis builds on an improved database of bilateral stocks and net migration flows of immigrants and emigrants by education level for the years 1990 through 2000. We find that all European countries experienced a decrease in their average wages and a worsening of their wage inequality because of emigration. Whereas, immigration had nearly equal but opposite effects. These patterns hold true using a range of parameters for our simulations, accounting for the estimates of undocumented immigrants, and correcting for the quality of schooling and/or labor-market downgrading of skills. In terms of economic outcomes, it follows ... AbstractIn this paper, we simulate the long-run e¤ects of migrant ‡ows on wages of high-skilled and low-skilled non-migrants in a set of countries using an aggregate representation of national economies. We focus on Europe and compare the outcomes for large Western European countries with those of other key destination countries both in the OECD and outside the OECD. Our analysis builds on an improved database of bilateral stocks and net migration ‡ows of immigrants and emigrants by education level for the years 1990 through 2000. We …nd that all European countries experienced a decrease in their average wages and a worsening of their wage inequality because of emigration. Whereas, immigration had nearly equal but opposite e¤ects. These patterns hold true using a range of parameters for our simulations, accounting for the estimates of undocumented immigrants, and correcting for the quality of schooling and/or labor-market downgrading of skills. In terms of economic outcomes, it follows that prevalent public fears in European countries are misplaced; immigration has had a positive average wage e¤ect on native workers. These concerns would be more properly focused on the wage e¤ect of emigration. JEL Codes: F22, J61, J31.

A Global View of Cross-Border Migration

“…To calibrate the parameters governing the relative demand for skilled labor in production in each country we estimate skill premia following the approach of Docquier, Özden, and Peri (). First, we use the Barro and Lee () data to compute the average years of education in the two skill groups (individuals with some college education and individuals without) for each country in our sample for the year 2005 .…”

“…We try to use estimates based on 1995 data, which is the most recent period reported by Hendricks (). If the Mincerian coefficient estimate is not available for a country we follow Docquier, Özden, and Peri () and impute that value on the basis of estimates from neighboring countries with similar levels of income per capita.…”

A firm level perspective on migration: the role of extra-EU workers in Italian manufacturing

“…By means of Census or Labour Force survey data, most of the empirical studies have found evidence of complementarity between domestic and foreign labour and only modest evidence of detrimental effects deriving from immigration, or even no evidence at all (Card 2001;Ottaviano and Peri 2011;D'Amuri and Peri 2011). At the aggregate level, Docquier et al (2010) compute long-run effects of both immigration and emigration flows on wages of native low-skilled and highskilled workers in European countries between 1990 and 2000. While emigration negatively affects average wages and wage inequality, the effect of immigration is positive on both sides.…”

Immigration, Jobs, and Employment Protection: Evidence From Europe Before and During the Great Recession

“…This is not only true for US immigrants but also for immigrants to European countries. See for instance Docquier, Özden, and Peri's () data and empirical analysis that emphasize this fact.…”