The impact of immigration on UK regional wages: 1991-2016 -PhD thesis-

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Deboshree Ghosh

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The interest in the effects of immigration on the UK labour market has increased in the past decade. According to the ONS, the upsurge of non-EU citizens in the UK began in 1997 and peaked in 2004 before declining thereafter. Following the A8- accession in 2004, the migration of EU citizens has witnessed a cyclical pattern by increasing till the recession, declining, and then increasing again in recent years. Migration patterns have also changed regionally. For example, traditionally immigrant attracting regions such as London saw the lowest percentage increase in foreign born workers, whereas regions like the North east of England, Wales and Scotland gained popularity between 2005 and 2016. This thesis aims at understanding the impact of immigration on UK regional wages between 1991 and 2016. The analysis presented in this thesis is split by the pre-and post-recession periods using the BHPS and the UKHLS datasets. The instrument variable based estimation results suggest that at the regional level, immigration had an insignificant impact on native average wages in the pre-recession period (1999-2009) but had a negative impact in the postrecession period (2009-2016) in Great Britain. For England, the results were negative in the pre-recession period possibly indicating the importance of migration to the labour markets of Scotland and Wales. Allowing for imperfect substitution between natives and immigrants, at the wage distribution level of the natives, the results concluded that in the pre-recession period, immigrants had a negative impact on the 10th wage percentile. In the post-recession period, the impact was concluded to be positive at all percentiles and insignificant at the 10th wage percentile. The analysis was also extended by including the regional role of capital adjustment with imperfect substitution between immigrants and natives. The results indicated that immigrants had a negative impact on regional average wages of England from 2009-2016.


Area Effects, Regional Economics, Migration, Labour Market and Wages And Earnings