of the way immigration affects labour market outcomes of native born workers in Britain, set beside a theoretical discussion of the underlying economic mechanisms. We discuss problems arising in empirical estimation, and how to address them. We show that the overall skill dis-tribution of immigrants is remarkably similar to that of the native born workforce. We find no strong evidence that immigration has overall effects on aggregate employment, participation, unemployment and wages but some differences according to education. The possible negative effects of immigration on wages and employment outcomes of native workers is one of the core concerns in the public debate on immigration. Economic theory is well suited to help understand the possible consequences of immigration for receiving economies, and the theoretical aspects of the possible effects of immigration for the receiving economies labour markets are well understood. That is not to say that predictions of theory are clear-cut, however. It is compatible with economic models that changes in the size or composition of the labour force resulting from immigration could harm the labour market prospects of some native workers; however, it is likewise compatible with theory that immi-

We thank Joshua Angrist and seminar participants at the Hebrew University, the conference on “Inequality,

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This paper provides an empirical investigation of the way immigration affects labour market outcomes of native born workers in the UK, set beside a theoretical discussion of the underlying economic mechanisms. We discuss the problems that may arise in empirical estimations, and suggest ways to address these problems. Our empirical analysis is based on data from the British Labour Force Survey. We show that the overall skill distribution of Britain’s immigrant workforce is remarkably similar to that of the native born workforce. We investigate the impact of immigration on employment, participation, unemployment and wages of the resident population. We find no evidence that immigration has overall effects on any of these outcomes at the aggregate level. There is some evidence that effects are different for different educational groups. The Impact of Immigration on the UK

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An increasingly important issue faced by Western countries is the social tension created by growing numbers of immigrants from less developed countries. While there has been abundant research on the effects of immigration on wages, employment and crime, relatively little is known about the effects of immigration on the school system. Yet, it is conceivable that some of these tensions may manifest themselves particularly acutely inside schools. A disproportionate share of school resources is likely to be devoted to immigrants, for at least two important reasons. First, the gap in fertility rates between immigrants and the native-born implies that a large and growing share of the school population is made up by immigrants or immigrants ’ children. Second, immigrant children have to cope with the difficulties associated with the adoption of a new language, and therefore may necessitate more one-to-one teaching, remedial classes, adjunct teachers, and so forth. It is then natural to ask whether the presence of immigrants in a school has adverse effects on the academic achievements of native students. This paper exploits the mass migration wave to Israel in the 1990s to examine the impact of

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Abstract. Research on the labor market impact of immigration typically relies on a single-good capital neutral model of production. In this article, I discuss theory and evidence that suggest that this standard model is too simple to capture the labor market impact of immigration. A reasonable level of capital-skill complementarity, for which there is considerable support outside research on immigration, alone reduces the relative wage impact of immigration by 40 percent compared to simulations with neutral capital. Other models in which the production structure endogenously responds to skill mix changes, including models with endogenous choice of technique, directed technical change, or human capital spillovers, also imply the impact of immigration could be considerably different than predicted by the standard model. I discuss new evidence on some of these models, and evidence that immigration affects innovation and firm formation. Immigrationderived variation in skill mix has further potential to credibly refute such models. JEL: J23, J24, J61, O31, O33

This paper examines the relationship between immigration, the labor market and economic development in France. Using a system of equations for unemployment, immigration, wage and gross domestic product, the estimation of a cointegration relationship shows there is no observed increase in aggregate unemployment due to immigration in the long run. The vector error correction model indicates that immigration influence negatively unemployment and past immigration has a smaller impact on increasing wages in the short run. Despite institutional differences, migration flows have weak (positive) effects on employment in the long run. I.