Abstract

How does immigration have an effect on the wages of native workers? Does it actually have one? This article develops an econometric analysis based on the presence of immigrant workers and on their skill composition in order to evaluate how differences in immigrants’ share affect the mean wage and wage distribution of native-born Italian workers, adopting an approach similar to the work of Dustmann, Frattini and Preston (2013). Based on the theoretical assumption that immigration would lower wages for those points in the distribution of wages in which immigrants would be more abundant, the empirical results display the overall impact for mean and median wage to be positive, while it shows to be negative for the 25th percentile of the natives’ wage distribution. To handle the endogeneity coming from the geographical collocation of immigrants, the first difference of immigrants’ share variable has been instrumented with different lags of the variable itself, though this does not prove to be a good instrument after the 6th lag onwards.