UK wages raised by immigration

11 May 2012 | Posted by Carl Thomas

 UK immigration has helped to raise the average wage of workers born in this country, according to a recent report.

The paper, published in the Review of Economic Studies, focused on the years between 1997 and 2005, during which there was a rise in the foreign-born population equal to three per cent of the native population.

According to the paper's authors, immigration depressed wages by 0.7p per hour at the tenth percentile of UK-born workers. However, over the same period, immigration contributed about 1.5p per hour in wage growth among median workers and slightly more than 2p per hour at the 90th percentile.

Christian Dustmann, Tommaso Frattini and Ian Preston – the economists who worked on the paper – suggested that immigration could prompt wage inflation among the majority of workers due to the fact that immigrants often take work below their qualification level and can be underpaid in comparison to their economic contribution.

The researchers added: "Immigration affects different parts of the workforce differently. Over the period we consider, there have been gainers and losers and while the gainers may have outnumbered the losers and the gains may have been positive on average, the losers tend to have been lower down the wage distribution than the gainers."