Distributional effects of immigration and imperfect labour markets

Julian Costas-Fernandez () and Simon Lodato ()
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Julian Costas-Fernandez: University College London
Simon Lodato: Middlesex University London

No 2301, CReAM Discussion Paper Series from Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London

Abstract: We present evidence whereby immigration increases labour productivity while reducing the labour share, thus redistributing income from workers to employers. This result is unlikely in competitive markets with skill-neutral capital, where labour share is orthogonal to immigration shocks in the long run. Instead, our empirical evidence better matches predictions from imperfect labour market models where immigrant and native workers are heterogeneous in both skills and labour supply elasticities.

Keywords: Immigration; Productivity; Labour Share; Imperfect Labour Markets; FactorIncome Distribution (search for similar items in EconPapers)
JEL-codes: D33 J21 J24 J42 J61 O47 (search for similar items in EconPapers)
Date: 2023-01
New Economics Papers: this item is included in nep-int, nep-mig and nep-ure
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