Immigration and displacement across local labour markets

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Description/Abstract

This paper investigates the impact of contemporary flows of immigrants on internal movements of natives and earlier immigrants across the local authorities of England and Wales. To analyse the impact of immigration, a theoretical framework where natives and immigrants are imperfect substitutes is adopted. The econometric analysis, based on the instrumental variable approach proposed by Card (2001), shows that immigration does not displace native working-age
population; instead, flows of natives are complementary with those of new immigrants. There is evidence of displacement for earlier immigrants, with a substantial impact for those with no or low qualifications. Robustness tests are provided to corroborate the results