Migration, trade and wages

This paper analyses the impact of immigration on the UK labour market using the GNP function approach. We find that an increase in the number of unskilled immigrants reduces the wages of unskilled domestic workers, though the quantitative impact of this increase is small. No discernible impact of migration is found for skilled native workers. The results also suggest that unskilled immigrant workers and imports are substitutes in production, whilst skilled immigrant workers and imports are complements.