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Immigration wage effects in Sweden: Examining the effect of immigration induced labor supply shocks on natives' earnings using the national skill cell approach
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2015 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This study is aimed at exploring the wage effect of labor supply shocks due to immigration in Sweden. The question I examine is: has immigration affected earnings negatively or positively for males in the native labor force in Sweden between the years 1994-2005? The method used in the paper is the national skill cell approach and the data consist of Swedish register-based longitudinal data. I use annual earnings as a proxy for wages and assign workers into experience-education cells. My main estimation of the immigration wage effect on natives earnings is statistically insignificant, with no clear effect of immigration induced labor supply shocks on the annual wage earnings on natives. The analysis is diversified to observe potential heterogonous wage effects for Nordic immigrants and other immigrants, however the estimated wage effect for both Nordic immigrants and non-Nordic immigrants are statistically insignificant. I present evidence indicating a negative effect of immigration on earnings for native men with shorter college education, however this result should be interpreted with caution as there is reason to question the data quality on education attainment in LINDA. In my conclusion I state that major challenges for examining the immigration wage effect when using the national skill cell approach with Swedish data are insufficient data quality and economic institutions on the Swedish labor market. The national skill cell methodology entails interesting features to study immigration wage effects, but inherent difficulties of the method to assign individuals to the correct skill groups based on observable characteristics requires further research.

Place, publisher, year, edition, pages
Keyword [en]
immigration, immigration wage effects, integration
National Category
URN: urn:nbn:se:uu:diva-256764OAI: oai:DiVA.org:uu-256764DiVA: diva2:826884
Available from: 2015-06-26 Created: 2015-06-26 Last updated: 2015-06-26Bibliographically approved

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