Selective Immigration Policies and Wages Inequality

Abstract

International audienceWe quantify the overall impact of immigration on native wages in France from 1990 to 2010. Our short-run simulations indicate that immigration has decreased native wages by 0.6%. We find on average no impact of immigration on wages in the long run. However, we show that the long-run effects of immigration on wages are detrimental to high-skilled native workers and benefits to low-skilled native workers. Our structural estimation allows us to evaluate the impact of “selective” migration policies. In particular, we find that selective immigration policies toward highly educated workers reduce the wage dispersion of French native workers

How do rigid labor markets absorb immigration? Evidence from France

“…The size of this supply shock was not evenly distributed across education-experience groups. Over our period of interest (1990)(1991)(1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002), immigration has disproportionately increased the number of highly and mediumeducated workers (Edo and Toubal 2015). Moreover, these supply shifts did not affect all age groups within these populations equally.…”

“…The three education levels correspond to tertiary education (some college or more), secondary education (high school graduates and some high school), and primary education (less than high school). This choice strictly follows Edo and Toubal (2015) who show for France (over the period 1990-2010) that three education groups are an accurate decomposition to investigate the labor market impact of immigration. The use of three education groups is also consistent with multiple European studies on the labor market impact of migration (D' Amuri et al 2010;Gerfin and Kaiser 2010;Elsner 2013), as well as with Brücker et al (2014, p. 211) who indicate that "it is most suitable to distinguish three education groups in European labor markets."…”

“…In fact, firms should have incentives to have permanent workers and, therefore, to transform fixed-term into indefinite-term contracts as long as it is costly for them to have vacant jobs and look for new employees. 9 In France, over the 1990-2010 period, the studies by Edo (2015) and Edo and Toubal (2015) find that immigrants and natives of similar education and experience tend to be perfect substitutes in production. 10 Edo (2015) Borjas (2003) for details).…”

“…1 See Edo and Toubal (2015) for a complement study on the overall impact of immigration on French wages in the long run. See also the contribution of Ortega and Verdugo (2014) who study the occupational mobility among French natives in response to immigration over the period 1968-1999, as well as the study by Mitaritonna et al (2014) on the impact of immigration on French firm's productivity.…”

“…In order to quantify the overall impact of immigration on the wages of native workers, a recent wave of European studies thus accounts for the sluggish adjustment of wages (see, e.g., D' Amuri et al (2010), Felbermayr et al (2010), and Brücker and Jahn (2011) for Germany; Brücker et al (2014) for Denmark; and Edo and Toubal (2015) for France). Other studies complement these investigations by examining the work for this analysis since it has a rigid wage structure (Card et al 1999), and around 88 % of workers are covered by indefinite-term contracts.…”