Ian Preston

The Impact of Immigration on the British Labour Market

Using data from the British Labour Force Survey this article provides an empirical investigation of the way immigration affects labour market outcomes of native born workers in Britain, set beside a theoretical discussion of the underlying economic mechanisms. We discuss problems arising in empirical estimation, and how to address them. We show that the overall skill distribution of immigrants is remarkably similar to that of the native born workforce. We find no strong evidence that immigration has overall effects on aggregate employment, participation, unemployment and wages but some differences according to education.

ATTITUDES TO ETHNIC MINORITIES, ETHNIC CONTEXT AND LOCATION DECISIONS*

The attitudes of ethnic majority populations towards other communities is a potentially important determinant of social exclusion and of the welfare of ethnic minorities. The suggestion that negative attitudes towards minorities may be affected by the ethnic composition of the locality in which individuals live has often been made and empirically investigated. We point to an important potential for bias in simple estimates of ethnic context effects if individual location decisions are driven in part by attitudinal factors. We also suggest an instrumental variables procedure for overcoming such bias in data with appropriate spatial information. Our results suggest that allowing for such effects is of considerable importance.

Is Immigration Good or Bad for the Economy? Analysis of Attitudinal Responses

In this paper, we study attitudinal responses of host country residents towards further immigration that are triggered by economic considerations. We develop an economic model motivating the empirical work that takes a broader view on these issues than previous papers. We provide empirical analysis that is based on data more specific and better suited to pick up the many channels of economic interest through which benefits and costs of immigration may be felt. Results support previous literature in establishing strong associations between individual characteristics and a wide range of responses to questions relating to perceived impact of immigrants on economic outcomes. Our analysis points towards harmful effects of immigration on the economy being felt through immigration being a fiscal burden rather than having adverse effects on the labour market.

The Measurement of Household Welfare

The measurement of household welfare is one of the most compelling yet demanding areas in economics. To place the analysis of inequality and poverty within an economic framework where individuals are making decisions about current and lifetime incomes and expenditures is a difficult task, made all the more challenging by the complexity of the decision-making process in which households are involved and the variety of constraints they face. This 1994 book examines the conceptual and practical difficulties of making inferences from observed behaviour. It addresses the problems of making comparisons across a range of very different households and discusses how data for such comparisons should be collected. The contributions, from experts from Europe, North America and Australia, have the unifying theme that there is a strong relationship between theoretical concepts from microeconomics and the appropriate use of micro data in evaluating household welfare.

Private and public health insurance in the UK

Abstract This paper investigates the interaction between state health provision and private medical insurance in the UK. Regional data on private insurance and national health service waiting lists are used to assess whether higher levels of private insurance can affect performance of the public health sector.

Sampling distributions of relative poverty statistics

This paper considers the statistical reliability of poverty estimates widely used in the policy-making statistics community. It derives exact small and large sample distributions for proportions of a sample falling below given fractions of sample median income (or other sample quantiles) and uses the resulting formulae to assess statistical significance of changes in relative poverty in the UK over the 1980s.

From Earnings Inequality to Consumption Inequality

This paper studies the paths from inequality in earnings to inequality in household consumption. We show that careful study of the evolution of the variances and covariances of earnings and consumption within cohorts across time can identify permanent and transitory shocks. We present an application to the evolution of inequality in the United Kingdom. We extend previous results to recognise separate earnings of partners in couples.

Life-Cycle Expenditure Allocations and the Consumption Costs of Children

Abstract In this paper we assess whether it is changing needs or intertemporal substitution that dominate household expenditure responses to the presence of children over the life-cycle. We construct lifetime expenditure paths for households with different demographic profiles and consider the shape of these paths and some possible implications for welfare measures. Simulated expenditure paths based on consistent single-period and multi-period models indicate that it is indeed changing needs that dominate such paths in periods when children are present in the household. However, allowing for intertemporal substitution is still shown to be important since it can introduce new information relevant to the calculation of household welfare.

The Labour Market Effects of Immigration

Immigration has become one of the most important topics of popular debate in the UK. While the balance of public opinion is to reduce immigration, the numbers migrating to Britain has increased sharply over the last decade. Recent years have also seen a series of changes in immigration policy which have been accompanied by a heightened interest in research findings that can help to guide policy in the future. The papers in this Feature address some of the key economic issues. Do immigrants reduce wages and employment rates for non-immigrant workers? And what are the adjustment mechanisms through which immigrant labour is absorbed into the economy? How do immigrants perform in the UK labour market and how and why do they suffer disadvantage in the competition for jobs? There is a large empirical literature that debates these questions for the US and other traditional countries of immigration. For Britain, the literature is smaller and has not progressed as far. The articles in this Feature aim to advance the discussion, first with an examination of recent findings for the US, and then with three studies that address some of the same issues for the UK. To put the UK evidence into context, the first article is an assessment for the US by one of the leading US economists on the economics of migration. David Card investigates the impact of migration on US wages and employment, as well as the various mechanisms that may lead to adjustment. He also addresses the performance of immigrants in the US economy. Here he takes a slightly more general stand than much of the literature by considering the intergenerational adaptation of immigrants. His conclusions on employment and wage impact are in line with much of the previous literature: although immigration has strong effects on relative supplies of different skill groups, local labour market outcomes for low skilled natives are not much affected by these relative supply shocks. The evidence suggests that this is due to adjustment within industries, rather than across industries, to skill-group specific relative supply shocks. Card also argues that the evidence is not suggestive of displacement effects of native workers from one locality to another, an argument that is often used to account for small wage effects in studies based on local labour market analysis. Finally, Card’s analysis on immigrant assimilation supports the view that first generation immigrants do not on average catch up with natives in terms of economic performance, but shows a strong educational progress of second generation immigrants, where most catch up with children of natives. His paper provides an overall positive assessment of the new migration into the US. These issues remain controversial in the US. Borjas (2003) argues that the negative wage effects from immigration can be observed at the national level. There is disagreement about how local labour markets adjust to immigration and The Economic Journal, 115 (November), F297–F299. Royal Economic Society 2005. PublishedbyBlackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

Batting Strategy in Limited Overs Cricket

The paper attempts to understand batting strategies that are employed in limited overs cricket games. The question of the optimum batting strategy is posed in a simplified dynamic programming representation. We demonstrate that optimum strategies may be expected to differ fundamentally in the first and second innings, typically involving an increasing run rate when setting a target but a run rate which may decline over the course of an innings when chasing one. Data on English county level limited overs games are used to estimate a model of actual batting behaviour. The statistical framework takes the form of an interesting variant on conventional survival analysis models.