Earnings Inequality, Returns to Education and Immigration into Ireland

Alan Barrett, John Fitzgerald () and Brian Nolan

No 167, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Increasing earnings inequality has been an important feature of the US and UK labour markets in recent years. The increase appears to be related to an increased demand for skilled labour and an increase in the returns to education. In this paper we examine what has happened to earnings inequality and the returns to education in Ireland between 1987 and 1997. We find that while both increased between 1987 and 1994, the increases slowed dramatically between 1994 and 1997. This is somewhat surprising as the exceptional growth in the Irish economy occurred from 1994 on. We look to immigration as being a contributing factor to this pattern because a large group of skilled workers flowed into the Irish labour market between 1994 and 1997. We develop a model of the Irish labour market and use it to simulate the impact of an increase in skilled labour. The simulation suggests that immigration did indeed reduce earnings inequality. This result is an interesting corollary to work from the US that shows the immigration of unskilled workers increasing earnings inequality.

Keywords: immigration; returns to education; Earnings inequality; Ireland (search for similar items in EconPapers)
JEL-codes: J61 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2000-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Published - published in: Labour Economics, 2002, 9 (5), 665-680

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Related works:
Journal Article: Earnings inequality, returns to education and immigration into Ireland (2002)
Working Paper: Earnings Inequality, Returns to Education and Immigration into Ireland (2000)
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