Editing Openai/69640cff-e5e0-8003-a8d1-a78b118ca18b (section)

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Two cornerstone UK papers find that immigration’s wage impacts on UK-born workers are modest on average, but not uniform across the distribution:
* Dustmann, Frattini & Preston (Review of Economic Studies, 2013) estimate wage effects across percentiles. In their preferred IV-type specifications, increases in the immigrant-to-native ratio are associated with wage reductions at the very bottom (e.g., 5th/10th percentile) and wage gains around the middle/upper percentiles. They also summarize an average wage effect that is small and (in their estimates) slightly positive.
* Nickell & Saleheen (Bank of England, 2015 working paper) find small average effects but more noticeable impacts in some low-wage occupations; for example, they report that a 10 percentage-point rise in the immigrant share in semi/unskilled services is associated with about a 1.88% reduction in pay in that occupational group. That’s non-trivial for directly competing workers, but it’s still small relative to typical year-to-year wage variation and is about a large compositional shock.

For your welfare question, the key is: wage losses for some low-skilled natives are not automatically net welfare losses for “the UK”. They are primarily a distributional shift from those workers to:
* employers/capital owners (higher profits),
* complementary native workers (whose wages can rise),
* and consumers (if lower costs pass through into prices).

But if you care about native welfare with inequality aversion, the distributional effects become first-order.

===== Summaries of the empirical UK literature (and many primary studies underlying them) typically conclude little to no large aggregate employment displacement, with most effects concentrated (if at all) among specific lower-paid groups. =====

The upshot: the labour-market channel alone does not suggest large negative net welfare for residents, but it does imply that some low-skilled natives can lose.