Effects of Immigration on Wages: Theory and Evidence form European Countries

This paper uses panel data to uncover the effect that immigration induced labor supply shocks has on the wages of natives of different skill level using data from 26 European countries during 2004 to 2017. Innovations of this paper include the incorporation of time-dynamic considerations in conjunction with heterogeneous labor groups in both immigrant and native labor structures. Additionally, this paper brings forward a more relevant measure of immigrant penetration into a labor market. This paper finds no evidence of a negative relationship between immigration of different skill and native wages of different skill in European countries during the period under study