The effects of immigration on income distribution: The Swedish case

Sammanfattning: The purpose of this essay is to study what impact immigration has on the Swedish income distribution for the period 1992-2005. This essay uses a two-folded approach to study the income distribution, first, an income inequality measure will be investigated in order to find if the inequality increases or decreases by the increased immigration. Secondly, we estimate a quantile regression for the 10th, 50th and 90th percentiles for the period 1992, 1995, 2000 and2005, together with an OLS regression in order to find the income gap between the immigrants and natives, which is analysed for males and females separately. The study found that the inflow of immigrants increased income inequality in the lower tail of the income distribution. Immigrants at the upper tail of the income distribution are doing relatively better than the immigrants in the lower tail of the income distribution. Conclusively, independently of gender, the income gap between immigrants and natives is almost three times as large in the lower tail of the income distribution relative to the upper tail of the income distribution.