Migration and average wages in Sweden : Immigration as a labour supply shock on the Swedish labour market from the year 2011 to 2018 across municipalities

With the recent influx of foreign-born individuals migrating to Sweden, this study aims to answer the question, “do high skilled foreign-born individuals relate positively to average wages in Sweden?”. We specifically observe high skilled foreign-born individuals and their contribution to the average wage across different municipalities in Sweden between the years 2011 and 2018. The method carried out in this study consisted of an empirical analysis where the significance of economic factors was interpreted in order to understand the variation in wages. The data was extracted from Statistics Sweden. The relationship of the share of highly educated foreign-born individuals has proved to be insignificant with respect to average wages in Sweden. Different theories are discussed in this paper in order to identify the key labour market outcomes due to the labour supply shock. Our findings disclose that differences in wages are present, meaning that natives and foreign-born individuals are complements in the short ru