In this paper we estimate the impact of inward migration flows on the Spanish wage
structure over the period 1995-2002 by constructing counterfactual wage distributions
that provide the wages that would have been observed had individual and job
characteristics remain constant over time. Hence, we compute the impact of
immigration on the wage distribution from (i) the estimated wage gaps between similar
immigrants and native workers and (ii) the changes in the composition of employment
associated to the arrival of new immigrants.
Overall, we find that (i) the effects of immigration on wage changes are small and only
noticeable when job characteristics are included as determinants of wages, and (ii) the
correlation between the incidence of immigration in each decile of the wage distribution
and the change in native wages not explained by changes in their individual and job
characteristics is positive. These results suggest that other factors, besides immigration,
should be identified as the key determinants of the wage moderation observed since the
early nineties in Spain
