Abstract
This study examines the developments in the skill distribution of EU8 immigrants and UK natives between 1998 and 2008 in the UK, exploring to what extent wage differentials between these two groups are explained by the changing attributes of migrants and natives or by differences in returns to skill. After 2004, the number of immigrants from the new accession countries increased significantly. Using the UK Labour Force Survey, I compare the evolution of the immigrant-native wage gaps over two periods (before and after 2004) and compare them with those of other immigrant groups. Using the new unconditional quantile regression, I show that a large part of the decrease in the wage levels for EU8 is due to an increase in the wage gap at the top of the distribution.
Yet, also at the bottom a wider wage penalty is observed. At all points of the distribution occupational downgrading plays an important role. In order to rule out
the possibility that the increase in the gap is simply due to the lack of labour market assimilation, as the majority of EU8 immigrants only arrived after 2004, I compare recent immigrants after 2004. Results suggest that the decrease in the wage levels at the top of the distribution is mainly due to the lack of transferability of skills acquired in the source country. Also at the bottom EU8 immigrant wages have declined and worsened with respect to the period before the enlargement. It is likely that the nature of migration (temporary vs permanent) has a substantial role.