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Abstract for:

The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices

Max  Nathan,  February 2011
Paper No' SERCDP0067: | Full paper (pdf)
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Keywords: cities; migration, cultural diversity, labour markets, productivity, urban economics

JEL Classification: D24; J15; J61; O18; R11; R23

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
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British cities are becoming more culturally diverse, with migration a main driver. Is this growing diversity good for urban economies? This paper explores, using a new 16-year panel of UK cities. Over time, net migration affects both local labour markets and the wider economy. Average labour market impacts appear neutral. Dynamic effects may be positive on UK-born workers’ productivity and wages (via production complementarities for higher skill workers) or negative on employment (if migrants progressively displace lower-skill natives from specific sectors). The results, which survive causality checks, suggest both processes are operating in British cities. Long-term industrial decline and casualisation of entry-level jobs help explain the employment findings.