Skilled immigration and national wage growth: An international perspective

This paper analyzes the wage effect brought by influx of skilled immigration among OECD countries in 2000, 2005 and 2010 by testing the hypothesis that national wage rates are positively associated with skilled relative to unskilled immigration. In other words, a growing focus on skill level of immigrants in immigration policy-making will not hurt national wage rates.;Unlike previous studies conducted in main immigrant receiving countries like the United States, United Kingdom and Israel, this paper attempts to contribute to the literature by providing an international evidence reflecting most recent trends more broadly. Additionally, this paper adopts a new measure gauging the concentration of skilled immigration on a relative basis.;While the worldwide rising anti-immigration sentiments exacerbated by economic downturns encouraged policy-makers to raise immigration barriers, the structural reforms in labor demand and supply conversely suggested a higher need of well-educated, skilled labor. The empirical results of this study suggest that countries explicitly favoring the skilled have witnessed neither stronger wage growth nor positive productivity changes. Though the investigation of a causal relation is beyond the scope of this study, it is argued that countries should adapt policy change to facilitate a more effective attraction of global talents.