Prevalent public fears misplaced; immigration beneficial in terms of wages 5th January 2011: `The residents of Western European countries experienced wage gains, on average, from immigration, while they experienced wage losses due to emigration’.
If you have any doubts about the benefits of immigration to the economy, this is bound to remove them.
The report on `Wage effects of immigration and emigration’ by Université Catholique de Louvain, the World Bank and University of California, Davis, clearly says: `We find that European countries experienced a decrease in their average wages and a worsening of their wage inequality (between more and less educated) because of emigration.
`To the contrary, immigration had the opposite effects. These patterns hold true using a range of parameters for our simulations, accounting for the estimates of undocumented immigrants and correcting for the quality of their schooling and the labor-market downgrading of their skills.
`Our results imply that, from a wage point of view, the prevalent public fears in European countries are misplaced; the main concern should be the effects of emigration, not immigration’.
Université Catholique de Louvain, sometimes known as UCL, is Belgium’s largest French-speaking university. The report goes on to conclude: `Immigrants are highly visible to the governments and public in the destination countries, especially in times of economic anxiety and high unemployment levels.
`They are also relatively easy to measure by statistical agencies of the host countries through censuses, population and labor force surveys. At the opposite end of the spectrum, emigrants are much less visible to governments of their birth countries and less relevant to the general public, especially in the OECD countries where incoming remittances play a minor role.
`There is no mandatory registration for those who leave a country, they are dispersed in many receiving countries and no statistical agency keeps detailed records of all its emigrants and returnees.
`There is rarely a policy instrument that can affect emigration since freedom of movement allows people to leave any democratic country.
`During the last decades emigration has been considered mostly in connection with poor countries and usually in the context of brain drain. There have been since studies on the labor market impact of immigration in the destination since the 1970s.
`However, only very recently and only in connection with the debate on brain drain and brain gain, some economists have began to measure empirically the aggregate income effects of emigration
`This paper uses a recent database on emigration (that was so far missing) and immigration flows by schooling level between 1990 and 2000 across all countries in the world.
`Using a range of parameters and an aggregate representation of labor markets of receiving countries, we show that residents of Western European countries experienced wage gains, on average, from immigration while they experienced wage losses due to emigration.
`The magnitude of the wage losses due to emigration is roughly equal to or larger than the gains from immigration. This is due to the fact that both immigrants and emigrants in European countries are, on average, more educated relative to non-migrants.
`Moreover immigrants are generally imperfect substitutes for non-migrants bringing skills that only partially compensate the losses due to emigration. Our analysis also finds that immigration in Europe was somewhat more beneficial to the less educated natives, reducing their wage gap with highly educated, while the opposite is true of emigration.
`These surprising results imply that European countries should begin to discuss more seriously the causes and effects of their large emigration rates, rather than obsessing with immigration that has mostly been beneficial in terms of wages.