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Reservation Wages of First and Second Generation Migrants

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  • Constant, Amelie
  • Krause, Annabelle
  • Rinne, Ulf
  • Zimmermann, Klaus F

Abstract

This paper analyzes the reservation wages of first and second generation migrants. Based on recently collected and rich survey data of a representative inflow sample into unemployment in Germany, we empirically test the hypothesis that reservation wages increase from first to second generation migrants. Two extensions of the basic job search model, namely an unknown wage offer distribution and different reference standards, provide theoretical justifications for this conjecture. In both extensions, changing frames of reference are identified as a channel through which the phenomenon of increasing reservation wages may arise. In as far as language skills or self-evaluated returns to characteristics reflect a person’s frames of reference, we find empirical support for this mechanism to be present.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8208.

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Date of creation: Jan 2011
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Handle: RePEc:cpr:ceprdp:8208

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Keywords: ethnic identity; ethnosizer; Germany; job search; migration; reservation wages; unemployment;

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Citations

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Cited by:
  1. Anthony Edo, 2013. "The Impact of Immigration on Native Wages and Employment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00881131, HAL.
  2. Rinne, Ulf & Schüller, Simone & Zimmermann, Klaus F., 2010. "Ethnische Vielfalt und Arbeitsmarkterfolg," IZA Standpunkte 34, Institute for the Study of Labor (IZA).
  3. Arni, Patrick & Caliendo, Marco & Künn, Steffen & Zimmermann, Klaus F., 2014. "The IZA Evaluation Dataset Survey: A Scientific Use File," IZA Discussion Papers 7971, Institute for the Study of Labor (IZA).
  4. Constant, Amelie F. & Kahanec, Martin & Rinne, Ulf & Zimmermann, Klaus F., 2009. "Ethnicity, Job Search and Labor Market Reintegration of the Unemployed," IZA Discussion Papers 4660, Institute for the Study of Labor (IZA).
  5. Bergemann, Annette & Caliendo, Marco & van den Berg, Gerard J & Zimmermann, Klaus F, 2011. "The Threat Effect of Participation in Active Labor Market Programs on Job Search Behavior of Migrants in Germany," CEPR Discussion Papers 8295, C.E.P.R. Discussion Papers.
  6. Stephan Humpert & Christian Pfeifer, 2011. "Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective," Working Paper Series in Economics 214, University of Lüneburg, Institute of Economics.
  7. Constant, Amelie F. & Tien, Bienvenue N., 2011. "Report No. 41: Germany's Immigration Policy and Labor Shortages," IZA Research Reports 41, Institute for the Study of Labor (IZA).
  8. Anthony Edo, 2013. "The Impact of Immigration on Native Wages and Employment," Documents de travail du Centre d'Economie de la Sorbonne 13064, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

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