The effect of immigration on natives’ incomes in Finland

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School of Business | Master's thesis
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Authors

Date

2024

Department

Taloustieteen laitos

Major/Subject

Mcode

Degree programme

Economics

Language

en

Pages

47 + 2

Series

Abstract

I study the impact of immigration on natives’ earnings along their income distribution in Finland. By exploiting spatial and temporal variation in inflows of foreign-background migrants combined with a shift-share instrument I find that immigration has a negative and statistically significant effect on natives below the 40th income percentile, near zero effects on those between the 40th and 85th percentiles, and slightly positive but statistically insignificant effects on the those in and above the 90th percentile. The effects are largely more intense further away from the median. The implication is that immigrants are more substitutable with low-skill Finnish labor and more complementary to high-skilled natives which results in immigration increasing income inequality at least in the short-run.

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Thesis advisor

Sarvimäki, Matti

Keywords

immigration, natives, incomes, Finland

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https://urn.fi/URN:NBN:fi:aalto-202406164336

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[gradu] Kauppakorkeakoulu / BIZ