The Impact of Immigration on the Labour Market Outcomes of New Zealanders

David Maré and Steven Stillman

No 09_11, Working Papers from Motu Economic and Public Policy Research

Abstract: This paper uses data from the 1996, 2001 and 2006 New Zealand Census to examine how the supply of immigrants in particular skill-groups affects the employment and wages of the New Zealand-born and of earlier migrants. We first estimate simple CES production functions that allow for substitutability between workers from different skill-groups, but assume that, within skill-groups, migrants are perfect substitutes for non-migrants. We next estimate hierarchical CES production functions that allow for substitutability between immigrant and non-immigrant workers within skillgroups, but constrain the patterns of wage impacts on different factors in response to changing factor shares, and that natives and migrants are not substitutable across skill-groups. Then, we extend the previous literature by estimating a Generalised Leontief production function that allows for a less restrictive relationship between changes in factors shares and changes in wages within a particular level of the production function and for substitution and complementarity between immigrant and nonimmigrant workers both between and across skill-groups. Regardless of the model being estimated, we find little evidence that immigrants negatively affect either the wages or employment opportunities of the average New Zealand-born worker. However, we find some evidence that increases in the number of high-skilled recent migrants have small negative impacts on the wages of high-skilled New Zealand-born workers, which are offset by small positive impacts on the wages of medium-skilled New Zealanders.

Keywords: Immigration; Wage Impacts; New Zealand; Labour Market Areas (search for similar items in EconPapers)
JEL-codes: J61 R23 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (14)

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