Distributional effects of immigration and imperfect labour markets

Article


Costas-Fernández, J. and Lodato, S. 2024. Distributional effects of immigration and imperfect labour markets. Economics Letters. https://doi.org/10.1016/j.econlet.2024.111832
TypeArticle
TitleDistributional effects of immigration and imperfect labour markets
AuthorsCostas-Fernández, J. and Lodato, S.
Abstract

In canonical models, the labour share is orthogonal to immigration shocks in the long run, regardless of the impact of immigration on productivity. In contrast, this paper provides evidence that immigration increases labour productivity while reducing the labour share. We produce this evidence using data from Great Britain with a shift-share instrument that exploits European Union expansions and changes in immigration to other high-income countries. Our results are consistent with the predictions from imperfect labour market models, where immigrant and native workers are heterogeneous in skills, and the former have lower labour supply elasticities than the latter. A significant implication of our analysis is that immigration redistributes income from workers to employers.

KeywordsImmigration; Productivity; Labour Share; Imperfect Labour Markets; Factor Income Distribution
Sustainable Development Goals10 Reduced inequalities
Middlesex University ThemeHealth & Wellbeing
PublisherElsevier
JournalEconomics Letters
ISSN0165-1765
Electronic1873-7374
Publication dates
Online01 Jul 2024
PrintSep 2024
Publication process dates
Submitted01 Apr 2024
Accepted21 Jun 2024
Deposited26 Jun 2024
Output statusPublished
Publisher's version
License
File Access Level
Open
Copyright Statement

Crown Copyright © 2024 Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

Digital Object Identifier (DOI)https://doi.org/10.1016/j.econlet.2024.111832
Web of Science identifierWOS:001272628200001
Permalink -

https://repository.mdx.ac.uk/item/158123

Download files


Publisher's version
1-s2.0-S0165176524003161-main.pdf
License: CC BY 4.0
File access level: Open

  • 42
    total views
  • 17
    total downloads
  • 3
    views this month
  • 2
    downloads this month

Export as

Related outputs

Political entrepreneurs and interest groups in the CPTPP ratification process in Chile: A case of politicization?
López, D., Dockendorff, A. and Lodato, S. 2024. Political entrepreneurs and interest groups in the CPTPP ratification process in Chile: A case of politicization? World Affairs. https://doi.org/10.1002/waf2.12042
Constituency service and representation in Chile: The effects of remoteness and social deprivation
Dockendorff A. and Lodato, S. 2024. Constituency service and representation in Chile: The effects of remoteness and social deprivation . Representation: Journal of Representative Democracy. 60 (3), pp. 545-557. https://doi.org/10.1080/00344893.2023.2237028
When do interest groups lobby legislators in strong presidential systems?
Dockendorff, A. and Lodato, S. 2024. When do interest groups lobby legislators in strong presidential systems? Legislative Studies Quarterly. https://doi.org/10.1111/lsq.12419
Inequality, poverty and the composition of redistribution
Costas-Fernandez, J. and Lodato, S. 2022. Inequality, poverty and the composition of redistribution. Social Choice and Welfare. 59 (4), pp. 925-967. https://doi.org/10.1007/s00355-022-01415-5
Industrial clusters and economic performance in Brazil
Cravo, T., Lodato, S., Pires, C. and Piza, C. 2013. Industrial clusters and economic performance in Brazil. Washington, D.C., United States Inter-American Development Bank.
A comparative analysis of IDB approaches supporting SMEs: assessing results in the Brazilian manufacturing sector
Pires, J., Lodato, S., Cravo, T. and Vellani, S. 2014. A comparative analysis of IDB approaches supporting SMEs: assessing results in the Brazilian manufacturing sector. Washington, D.C., United States Office of Evaluation and Oversight (OVE), Inter-American Development Bank (IDB).
Regulation to redistribute well-being: political incentives in poor countries
Lodato, S. 2018. Regulation to redistribute well-being: political incentives in poor countries. Essex Seminar. University of Essex, UK Aug 2018
The welfare effects of political money in regulation
Lodato, S. 2018. The welfare effects of political money in regulation. Essex Internal Seminar. University of Essex, UK Feb 2018