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Changes In The Czech Wage Structure: Does Immigration Matter?

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Executive Summary

Using the Albrecht et al. (2003) version of the Machado and Mata (2005) decomposition technique along the wage distribution, the authors find that immigrant workers do not affect changes in the Czech wage structure between 2002 and 2006 despite their substantial inflows. Instead, changes in the wage structure are explained solely by increasing returns of native workers, while changes in the observed characteristics of native workers, particularly a rising level of education, are responsible for increasing wage dispersion. The sizeable inflows of foreign workers in the sample years are concentrated among young workers with primary and tertiary education and are primarily due to rising labour demand.

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