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Immigration and Heterogeneous Labour in Western Germany: A Labour Market Classification Based on Nonparametric Estimation

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Author Info
Fröhlich, Markus
Puhani, Patrick A

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Abstract

This Paper presents a methodology to identify net demand shocks as well as wage rigidities in heterogeneous labour markets on the basis of nonparametric regression. We show how this approach can be used to make suggestions for immigration policy in economies with labour market rigidities. In an application to western Germany it is demonstrated that nonparametric regression is feasible in higher dimensions with only a few thousand observations. In sum, labour markets able to absorb immigrants are characterized by above average age and by professional occupations. On the other hand, labour markets for young workers in service occupations are identified to exhibit rising unemployment due to wage rigidities and are therefore not recommended for immigration.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3158.

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Date of creation: Jan 2002
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Handle: RePEc:cpr:ceprdp:3158

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Related research
Keywords: migration; nonparametric regression; rigidity; unemployment; wage;

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy

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References listed on IDEAS
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    Other versions:
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  15. Brecher, Richard A. & Choudhri, Ehsan U., 1987. "International migration versus foreign investment in the presence of unemployment," Journal of International Economics, Elsevier, vol. 23(3-4), pages 329-342, November. [Downloadable!] (restricted)
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    Other versions:
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