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Reservation Wages of First and Second Generation Migrants

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

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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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1089.

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Length: 33 p.
Date of creation: 2010
Date of revision:
Handle: RePEc:diw:diwwpp:dp1089

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Keywords: Migration; Ethnic Identity; Ethnosizer; Germany; Unemployment; Job Search; Reservation Wages;

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References

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  1. Marco Caliendo & Armin Falk & Lutz C. Kaiser & Hilmar Schneider & Arne Uhlendorff & Gerard van den Berg & Klaus F. Zimmermann, 2011. "The IZA Evaluation Dataset: towards evidence-based labor policy making," International Journal of Manpower, Emerald Group Publishing, vol. 32(7), pages 731-752, November.
  2. Ben Kriechel & Gerard Pfann, 2006. "Learning to update your reservation wage while looking for a new job," Portuguese Economic Journal, Springer, vol. 5(2), pages 135-148, August.
  3. Yann Algan & Christian Dustmann & Albrecht Glitz & Alan Manning, 2009. "The economic situation of first- and second-generation immigrants in France, Germany and the United Kingdom," LSE Research Online Documents on Economics 28680, London School of Economics and Political Science, LSE Library.
  4. Alisher Aldashev & Johannes Gernandt & Stephan L. Thomsen, 2008. "The Immigrant Wage Gap in Germany," FEMM Working Papers 08019, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
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  6. Riphahn, Regina T., 2001. "Cohort Effects in the Educational Attainment of Second Generation Immigrants in Germany: An Analysis of Census Data," IZA Discussion Papers 291, Institute for the Study of Labor (IZA).
  7. Constant, Amelie F. & Gataullina, Liliya & Zimmermann, Klaus F., 2006. "Ethnosizing Immigrants," IZA Discussion Papers 2040, Institute for the Study of Labor (IZA).
  8. Uhlendorff, Arne & Zimmermann, Klaus F, 2006. "Unemployment Dynamics among Migrants and Natives," CEPR Discussion Papers 5872, C.E.P.R. Discussion Papers.
  9. Constant, Amelie & Zimmermann, Klaus F., 2009. "Work and Money: Payoffs by Ethnic Identity and Gender," CEPR Discussion Papers 7366, C.E.P.R. Discussion Papers.
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  12. Amelie Constant & Klaus F. Zimmermann, 2006. "Legal Status at Entry, Economic Performance, and Self-Employment Proclivity: A Bi-National Study of Immigrants," Discussion Papers of DIW Berlin 547, DIW Berlin, German Institute for Economic Research.
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  21. Amelie Constant & Liliya Gataullina & Klaus F. Zimmermann, 2008. "Naturalization Proclivities, Ethnicity and Integration," SOEPpapers on Multidisciplinary Panel Data Research 77, DIW Berlin, The German Socio-Economic Panel (SOEP).
  22. Bonin, Holger & Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2007. "Cross-sectional earnings risk and occupational sorting: The role of risk attitudes," Munich Reprints in Economics 20204, University of Munich, Department of Economics.
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Citations

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Cited by:
  1. Annette Bergemann & Marco Caliendo & Gerard J. van den Berg & Klaus F. Zimmermann, 2011. "The threat effect of participation in active labor market programs on job search behavior of migrants in Germany," International Journal of Manpower, Emerald Group Publishing, vol. 32(7), pages 777-795, November.
  2. Humpert, Stephan & Pfeifer, Christian, 2013. "Explaining age and gender differences in employment rates : a labor supply side perspective," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(1), pages 1-17.
  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. Rinne, Ulf & Schüller, Simone & Zimmermann, Klaus F., 2011. "Ethnische Vielfalt und Arbeitsmarkterfolg (Ethnic diversity and labor market success)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 44(1/2), pages 81-89.
  5. Amelie Constant & Martin Kahanec & Ulf Rinne & Klaus F. Zimmermann, 2009. "Ethnicity, Job Search and Labor Market Reintegration of the Unemployed," Discussion Papers of DIW Berlin 963, DIW Berlin, German Institute for Economic Research.
  6. Anthony Edo, 2013. "The Impact of Immigration on Native Wages and Employment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00881131, HAL.
  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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