Migration and Wage Inequality. Economic Effects of Migration to and within Sweden, 1993-2003

The questions addressed in this paper are (i) whether immigration and domestic migration over time contributes to changes in wage inequality, and (ii) if so, which parts of the income distribution are these changes associated with? Finally, (iii) what are the correlates of changes in inequality, and does ethnic and educational background of the migrant population matter? Using full population data for 1993 and 2003 for Swedish local labour markets, a fixed effect model is estimated. Factors associated with increasing wage inequality are positive net migration of the Swedish born, increasing educational inequality and low levels of employment. Immigration and domestic migration of the foreign born has no statistically significant effect.