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Do Immigrants Affect Firm-Specific Wages?

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  • Nikolaj Malchow-Møller
  • Jakob R. Munch
  • Jan Rose Skaksen

Abstract

In this paper, we propose and test a novel effect of immigration on the wages of native workers. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, the use of immigrants may also affect wage formation at the most disaggregate level – the workplace. Using linked employeremployee data, we find that an increased use of workers from less developed countries has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and IV. Additional evidence suggests that this effect works at least partly through a general effect on the wage norm in the firm of hiring employees with poor outside options (the immigrants).

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 114 (2012)
Issue (Month): 4 (December)
Pages: 1267-1295

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Handle: RePEc:bla:scandj:v:114:y:2012:i:4:p:1267-1295

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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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Citations

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Cited by:
  1. Malchow-Møller, Nikolaj & Munch, Jakob R. & Seidelin, Claus Aastrup & Skaksen, Jan Rose, 2013. "Immigrant Workers and Farm Performance: Evidence from Matched Employer-Employee Data," IZA Discussion Papers 7133, Institute for the Study of Labor (IZA).
  2. Cristina Mitaritonna & Gianluca Orefice & Giovanni Peri, 2014. "Immigrants and Firms' Productivity: Evidence from France," Working Papers 2014-09, CEPII research center.
  3. Julie L. Hotchkiss & Myriam Quispe-Agnoli & Fernando Rios-Avila, 2012. "The wage impact of undocumented workers," Working Paper 2012-04, Federal Reserve Bank of Atlanta.

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