What does immigration do to wages?

“I agree that unfettered mass immigration has been used to depress wages, especially on the low skill level.”

Lionel Shriver, 24 May 2018

“If you look at the evidence of why we have seen wages going down, there is actually very little evidence that that is being caused by migration, aside from in construction.”

Anneliese Dodds, 24 May 2018

Both panellists hit on a key point: the impact of immigration on wages depends on who you are, what kind of job you do and where you do it. It also might not be the same from year to year.

It is difficult to measure the overall effects of immigration on jobs definitively.

Studies that have tried to do it in the UK have sometimes reached opposing conclusions about whether it increases or decreases wages overall but they tend to agree that immigration has a small impact on average wages of existing workers.

The effects of immigration on workers within specific wage ranges or in specific occupations are more significant. There is quite a lot of evidence that immigration affects low-waged workers the most negatively, and not just in construction.

• Research from University College London finds that an inflow of immigrants the size of 1% of the UK-born population leads to a 0.6% decline in the wages of the 5% lowest paid workers and to an increase in the wages of higher paid workers.
• Similarly, another study focusing on wage effects at the occupational level during 1992 and 2006, found that, in the unskilled and semi-skilled service sector, a 1% rise in the share of immigrants reduced average wages in that occupation by 0.5%.
• An updated version of this study, considering the period between 1992 and 2014, found similar results. This study found that a 1% rise in the share of immigrants reduced averages wages in unskilled and semi-skilled service sector by just under 0.2%.

The available research also shows that any declines in wages are likely to be greatest for resident workers who are themselves migrants. This is because the skills of new immigrants are likely to be more similar to the skills of migrants already employed in the UK than for those of UK-born workers.

Declines in the wages and employment of UK-born workers in the short run can be offset by rising wages and employment in the long run.

Read our full briefing on How immigrants affect jobs and wages, which was written by Oxford University’s Migration Observatory in collaboration with Full Fact.