Cross-occupational Effects of Immigration on Native Wages in the UK

This paper estimates the effect of immigration into an occupation on the wages of natives working in other, better paid occupations. Using Annual Population Survey data from the UK we rank occupations by real hourly wage and find that increases in the migrant/native ratio raise average wages of natives working in the next higher paid occupation by around 0.13 percent. We find that these effects operate through migrants' higher educational attainments raising workplace productivity more broadly and supporting specialization in tasks. Our findings have important implications for policy and public discourse. They suggest that debates over the economic impacts of migration often ignore the potential spill-over benefits that a migrant can bring to the outcomes for native workers elsewhere in the wage distribution, particularly in lower wage occupations.