Using data drawn from the Canadian, Mexican, and U.S. censuses, we find a numerically comparable and statistically significant inverse relation between immigrant-induced shifts in labor supply and wages in each of the three countries: A 10 % labor supply shift is associated with a 3%–4 % opposite-signed change in wages. Despite the similarity in the wage response, the impact of migration on the wage structure differs significantly across countries. International migration narrowed wage inequality in Canada; increased it in the United States; and reduced the relative wage of workers at the bottom of the skill distribution in Mexico. (JEL: J31, J61) 1.

Abstract: Previous research has reached mixed conclusions about whether higher levels of immigration reduce the wages of natives. This paper reexamines this question using data from the Current Population Survey and the Immigration and Naturalization Service and focuses on differential effects by skill level. Using occupation as a proxy for skill, the authors find that an increase in the fraction of workers in an occupation group who are foreign born tends to lower the wages of low-skilled natives—particularly after controlling for endogeneity—but does not have a negative effect among skilled natives. JEL classification: J61 Key words: immigrants, natives, wages

This paper asks whether immigration to Britain has had any impact on average wages. There seems to be a broad consensus among academics that the share of immigrants in the workforce has little or no effect on the pay rates of the indigenous population. But the studies in the literature have typically not refined their analysis by breaking it down into different occupational groups. In this paper we find that once the occupational breakdown is incorporated into a regional analysis of immigration in Britain, the immigrant‐native ratio has a significant, small, negative impact on average wages. Closer examination reveals that the biggest impact is in the semi/unskilled services sector. This finding accords well with intuition and anecdote, but does not seem to have been recorded previously in the empirical literature. JEL Classification: J6

There is economic evidence that diversity has consequences for economic performance (see Alesina and La Ferrara, 2005). This might have consequences for immigration policy – how many immigrants to allow into a country and from what cultural background. But, central to such a discussion is the pace of cultural assimilation among immigrants – this under-researched topic is the focus of this paper. It investigates the extent and determinants of British identity among those living in Britain and the views on rights and responsibilities in societies. We find no evidence for a culture clash in general, and one connected with Muslims in particular. The vast majority of those born in Britain, of whatever ethnicity or religion, think of themselves as British and we find evidence that third-generation immigrants are more likely to think of themselves as British than second generation. Newly arrived immigrants almost never think of themselves as British but the longer they remain in the UK, the more likely it is that they do. This process of assimilation is faster for those from poorer and less democratic countries, even though immigrants from these countries are often regarded as a particular cause for concern. Our analysis of rights and responsibilities finds much smaller differences in views between the UK-born and immigrants than within the UK-born population.

An earlier and shortened version of this paper was given as a speech at a lunch for members of the Cambridgeshire Chamber of Commerce on Thursday, 4th January 2007.

Abstract This paper studies the dynamic impact of highly skilled immigrants from the Former Soviet Union to Israel on natives' labor market outcomes. Specifically, we attempt to distinguish between the short-run and long-run effects of immigrants on natives' wages and employment. The transition of immigrants into a new labor market is a gradual process: the dynamics of this process come from immigrants' occupational mobility and from adjustments by local factors of production. Natives may therefore face changing labor market conditions, even years after the arrival of the immigrants. If immigrants are relatively good substitutes for native workers, we expect that the impact of immigration will be largest immediately upon the immigrants' arrival, and may become smaller as the labor market adjusts to the supply shock. Conversely, if immigrants upon arrival are poor substitutes for natives due to of their lack of local human capital, the initial effect of immigration is small, and increases over time as immigrants acquire local labor market skills and compete with native workers. We empirically examine these alternative hypotheses using data from Israel's Labor Force and Income Surveys from 1989 to 1999. We find that wages of both men and women are negatively correlated with the fraction of immigrants with little local experience in a given labor market segment. A 10 percent increase in the share of immigrants lowers natives' wages in the short run by 1 to 3 percent, but this effect dissolves after 4 to 7 years. This result is robust to a variety of different segmentations of the labor market, to the inclusion of cohort effects, and to different dynamic structures in the residual term of the wage equation. On the other hand, we do not find any effect of immigration on employment, neither in the short nor in the medium run. Keywords: Immigration, wages, employment, labor demand. JEL Codes: J31, J61, J21, J23, F22. * Forthcoming, European Economic Review. We are very thankful to Rachel Friedberg for gracefully sharing her data. We also thank Jennifer Hunt, Magnus Lofstrom, Saul Lach and seminar participants at the European University Institute, Bar-Ilan University, Ben Gurion University, the University of Haifa, Tel Aviv University, Uppsala University and at the IZA Annual Migration Meeting in Bonn (June 2004) for helpful comments. We acknowledge generous financial support from the Maurice Falk Institute for Economic Research in Israel. Stas Krasinski and Royi Ben-Ivri provided excellent research assistance. All errors are our own. The Dynamic Impact of Immigration on Natives' Labor Market Outcomes: Evidence from Israel Abstract This paper studies the dynamic impact of highly skilled immigrants from the Former Soviet Union to Israel on natives' labor market outcomes. Specifically, we attempt to distinguish between the short-run and medium-run effects of immigrants on natives' wages and employment. The transition of immigrants into a new labor market is a gradual process: the dynamics of this process come from immigrants' occupational mobility and from adjustments by local factors of production. Natives may therefore face changing labor market conditions, even years after the arrival of the immigrants. If immigrants are relatively good substitutes for native workers, we expect that the impact of immigration will be largest immediately upon arrival of the new immigrants and diminish over time as the labor market adjusts to the supply shock. Conversely, if immigrants upon arrival are poor substitutes for natives due to their lack of local human capital, the initial effect of immigration is small, and may increase over time as immigrants acquire local labor market skills and compete with native workers. We empirically examine these alternative hypotheses using data from Israel's Labor Force and Income Surveys from 1989 to 1999. We find that wages of both men and women are negatively correlated with the fraction of immigrants with little local experience in a given labor market segment. A 10 percent increase in the share of immigrants lowers natives' wages in the short run by 1 to 3 percent, but this effect dissolves after 4 to 7 years. This result is robust to a variety of different segmentations of the labor market, to the inclusion of cohort effects, and to different dynamic structures in the residual term of the wage equation. On the other hand, we do not find any effect of immigration on employment, neither in the short nor in the medium run.

The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit

for numerous comments and continuous support, and the Institute on Global Con‡ict and Cooperation for generous …nancial support. Since September 2000, the mobility of Palestinian workers into Israel has been permanently restricted. The new border policies generated an increase of about forty percent in the supply of workers competing for local jobs in the West Bank. Moreover, Israel restricted the movement of Palestinians within the West Bank. The exogeneity of this labor supply shock, a result of restrictive border policies, and the division of the West Bank into local labor markets provide a unique environment to study the e¤ects of labor supply shocks on labor market outcomes. Using the Palestinian Labor Force Survey for the years 2000-2004, two empirical strategies are used to identify the e¤ects of the supply shock on wages and employment patterns. The results suggest that a 10 percent increase in the labor supply of unskilled workers reduces their wages by about 2-5 percent. No e¤ects on wages are found among the skilled workers. The employment of unskilled workers seems to adjust much slower than for skilled individuals, generating a substantial rate of unemployment among the unskilled. The results will be used to analyze counterfactual policies that are at the core of any future agreement between Israel and the Palestinians, such as border controls and the return of Palestinian refugees to the West Bank.

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The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit