The Fiscal Effects of Immigration to the UK

In this paper, we investigate the fiscal impact of immigration on the UK economy, with a focus on the period since 1995. We provide estimates for the overall immigrant population for the period between 1995 and 2012, and for more recent immigrants who arrived since 2000, distinguishing between immigrants from European versus non-European countries. Overall, our findings indicate that EEA immigrants have made a positive fiscal contribution, even during periods when the UK was running budget deficits. This positive contribution is particularly noticeable for more recent immigrants that arrived since 2000 in particular from EEA countrie

Immigration: The European Experience

This paper first presents a brief historical overview of immigration in Europe. We then provide (and distinguishing between EU and non-EU immigrants) a comprehensive analysis of the skill structures of immigrants and their labor market integration in the different European countries, their position in the wage distribution, and the situation of their children, and discuss the disadvantage of immigrants and their children relative to natives. We show that immigrants – in particular those from non-EU countries – are severely disadvantaged in most countries, even if we compare them to natives with the same measurable skills. We conclude with a discussion of the role of regulations and institutions as one possible mechanism for these findings, and suggest directions for future research.immigration, Europe, integration, institutions

Immigration: The European Experience

This paper starts with a brief historical overview of immigration in Europe. We then provide a comprehensive analysis of the skill structures of immigrants and their labor market integration in the different European countries, their position in the wage distribution, and the situation of their children, and illustrate the economic situation of immigrants and their children relative to natives. We show that immigrants – in particular those from non-EU countries – are severely disadvantaged in most countries, even if we compare them to natives with the same measurable skills. We conclude with a discussion of the role of regulations and institutions as one possible mechanism for these findings, and suggest directions for future research.Immigration, Europe, Integration, Institutions.

Estimating the Effect of Immigration on Wages

We discuss approaches to estimating the effect that immigration has on wages of native workers which assume a three-level CES model, where immigrants and natives are allowed to be imperfect substitutes within an age-education cell, and predict the wage impact based on estimates of the elasticities of substitution at each level. We argue that this approach is sensitive to immigrants downgrading at arrival, and we illustrate the possible bias in estimating the elasticity of substitution between immigrants and natives.

Estimating the Effect of Immigration on Wages

We discuss approaches to estimating the effect that immigration has on wages of native workers which assume a three-level CES model, where immigrants and natives are allowed to be imperfect substitutes within an age-education cell, and predict the wage impact based on estimates of the elasticities of substitution at each level. We argue that this approach is sensitive to immigrants downgrading at arrival, and we illustrate the possible bias in estimating the elasticity of substitution between immigrants and natives.

How Do Industries and Firms Respond to Changes in Local Labor Supply?

In this paper, we investigate how changes in the skill mix of local labor supply are absorbed by the economy. We distinguish between three adjustment mechanisms: through factor prices, through an expansion in the size of those production units that use the more abundant skill group more intensively, and through more intensive use of the more abundant skill group within production units. We investigate which of these channels is dominant. We contribute to the existing literature by analyzing these adjustments on the level of firms, rather than industries, and by assessing the role of new firms in the absorption process of labor supply shocks. Our analysis is based on administrative data, comprising the entirety of firms in Germany over a 10 years period. We find that, while factor price adjustments are important in the non-tradable sector, labor supply shocks do not induce factor price changes in the tradable sector. In this sector, most of the adjustment to changes in relative factor supplies takes place within firms by changing relative factor intensities. Given the non-response of factor prices, this finding points towards changes in production technology. Our results further show, that firms that enter and exit the market are an important additional channel of adjustment. Finally, we demonstrate that an industry level analysis is likely to over-emphasize technology-based adjustments.immigration, endogenous technological change, firm structure

Ethnic Minority Immigrants and their Children in Britain

According to the 2001 UK Census ethnic minority groups account for 4.6 million or 7.9 percent of the total UK population. The 2001 British Labour Force Survey indicates that the descendants of Britain's ethnic minority immigrants form an important part of the British population (2.8 percent) and of the labour force (2.1 percent). In this paper, we use data from the British Labour Force Survey over the period 1979-2005 to investigate educational attainment and economic behaviour of ethnic minority immigrants and their children in Britain. We compare different ethnic minority groups born in Britain to their parent's generation and to equivalent groups of white native born individuals. Intergenerational comparisons suggest that British born ethnic minorities are on average more educated than their parents as well more educated than their white native born peers. Despite their strong educational achievements, we find that ethnic minority immigrants and their British born children exhibit lower employment probabilities than their white native born peers. However, significant differences exist across immigrant/ethnic groups and genders. British born ethnic minorities appear to have slightly higher wages than their white native born peers. But if British born ethnic minorities were to face the white native regional distribution and were attributed white native characteristics, their wages would be considerably lower. The substantial employment gap between British born ethnic minorities and white natives cannot be explained by observable differences. We suggest some possible explanations for these gaps.Ethnic Minorities/Immigrants, Education, Intergenerational comparisons, Employment, Wages

Immigration: The European Experience

This paper starts with a brief historical overview of immigration in Europe. We then provide a comprehensive analysis of the skill structures of immigrants and their labor market integration in the different European countries, their position in the wage distribution, and the situation of their children, and illustrate the economic situation of immigrants and their children relative to natives. We show that immigrants – in particular those from non-EU countries – are severely disadvantaged in most countries, even if we compare them to natives with the same measurable skills. We conclude with a discussion of the role of regulations and institutions as one possible mechanism for these findings, and suggest directions for future research.Immigration, Europe, Integration, Institutions.

Ethnic minority immigrants and their children in Britain

This paper investigates educational attainment and economic behaviour of ethnic minority immigrants and their children in Britain. Despite their strong educational achievements, ethnic minority immigrants and their descendants exhibit lower employment probabilities than their white native born peers. Although unconditional wages of British born ethnic minorities appear to be slightly higher than those of their white native born peers, their wages would be considerably lower if they had the same characteristics and regional allocation. Differences in wage offer distributions hardly account for the employment differences of British born ethnic minorities. Further, British born ethnic minorities have lower employment propensities for the same wages than native born whites. We examine possible explanations for these gaps.Ethnic Minorities/Immigrants, Education, Employment, Wages

Immigration: The European Experience

This paper first presents a brief historical overview of immigration in Europe. We then provide (and distinguishing between EU and non-EU immigrants) a comprehensive analysis of the skill structures of immigrants and their labor market integration in the different European countries, their position in the wage distribution, and the situation of their children, and discuss the disadvantage of immigrants and their children relative to natives. We show that immigrants – in particular those from non-EU countries – are severely disadvantaged in most countries, even if we compare them to natives with the same measurable skills. We conclude with a discussion of the role of regulations and institutions as one possible mechanism for these findings, and suggest directions for future research.Immigration; Europe; Integration; Institutions