Does Immigration Raise Blue and White Collar Wages of Natives? The Case of Italy (original) (raw)

This paper analyses theoretically and empirically the effects of immigration on the wage rate of native workers. Empirical literature rarely finds that immigration generates a fall in the wages of manual workers. The theoretical model presented in this paper justifies those results, by hypothesizing an economic system where advanced firms buy an intermediate good from traditional firms, which employ manual workers in both clean and dirty tasks, the latter being more disliked by native workers. We conclude that native skilled wages always increase whereas native unskilled wages can both increase or decrease with immigration. An empirical analysis of the Italian labour market follows, showing that all native workers' wages rise with immigration JEL Class.: J31; J61; J82.