Immigration, wages and employment evidence from France

Thesis: In the past two decades, the fraction of the population in developed countries that is foreign-born increased from 7% in 1990 to 10% in 2010. The rise in the demographic importance of international migration led to a parallel increase in the amount of time and effort that economists devote to studying the consequences of immigration. One of the main questions raised by economists is related to the labor impact of migration in receiving economies. What is the impact of immigration on the employment and earnings of native workers ? This dissertation contributes to the immigration literature through a deep empirical investigation on the effects of immigrants on native wages and employment in France over the 1990-2010 period. This dissertation is composed of two main parts. The first part investigates the short-run effects of immigration on the outcomes of competing native workers (who have skills similar to those of the migrants). I find that immigration has a very small negative impact on the wages of competing natives. This result is consistent with the prevalence of downward wage rigidities in France. However, I show that immigration decreases the employment rate of natives with similar education and experience : a 10% increase in the immigrant share due to an influx of immigrants is associated with a 3% fall in the employment rate of competing natives. Since immigrants are relatively more attractive for firms (while they are identical to natives in all other respects), a substitution mechanism operates between natives and immigrants. The second part extends the analysis by providing a full picture of the wage impact of immigration in France. In this part, I allow the labor market to adjust to immigration in the long-run. In addition, I account for the complementarity effects induced by immigration on the wages of natives with different skills. The estimates indicate no detrimental impact of immigration on the average wage of natives. This part also provides the distributional effects of immigration by education and gender. In as much immigrants to France has been disproportionately high educated in the past two decades, I find that immigration has reduced the wage of highly educated native workers and has contributed to raise the wage of low educated. Thus, immigration-induced shocks to French labor supply have served to reduce wage inequality between low educated and high educated workers. Moreover, I find that immigration has lowered the relative wage of female natives and increased the wage of male natives. This asymmetric effect is due to the facts that immigration has disproportionately increased the number of female workers since 1990, and also that men and women of similar education are imperfect substitutes in the production process.

Author(s)

Anthony Edo

Date of publication
  • 2014
Keywords
  • Immigrants
  • Natives
  • Wage inequality
  • Employment rate
Issuing body(s)
  • Université Panthéon-Sorbonne – Paris I
Date of defense
  • 13/10/2014
Thesis director(s)
  • Farid Toubal
Version
  • 1