The Impact of Immigration: Why Do Studies Reach Such Different Results?

Christian Dustmann, Uta Schönberg () and Jan Stuhler
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Uta Schönberg: University College London and CReAM
Authors registered in the RePEc Author Service: Uta Schoenberg

No 1626, RF Berlin - CReAM Discussion Paper Series from Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM)

Abstract: We classify the empirical literature on the wage impact of immigration into three groups, where studies in the first two estimate different relative effects, and the third 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. We show that heterogeneous labor supply elasticities, if ignored, may complicate the interpretation of wage estimates, in particular 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.

Keywords: Immigration; impact; wage effects (search for similar items in EconPapers)
JEL-codes: J21 J23 J24 J31 J61 (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-lab, nep-ltv, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (256)

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Related works:
Journal Article: The Impact of Immigration: Why Do Studies Reach Such Different Results? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:1626

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