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Wage and Employment Effects of Immigration to Germany: Evidence from a Skill Group Approach

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  • Bonin, Holger

    ()
    (ZEW Mannheim)

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    Abstract

    The paper analyzes the labor market impact of migration by exploiting variation in the labor supply of foreigners across groups of workers with the same level of education but different work experience. Estimates on the basis of German register data for the period 1975-97 do not confirm the hypothesis that penetration of migrants into skill cells has a significant negative effect on the earnings and employment opportunities of native men. The results indicate that a 10 percent rise of the share of immigrants in the workforce would in general reduce wages by less than one percent and not increase unemployment. Though the adverse effects appear stronger for less-qualified and older workers, the evidence altogether sharply contrasts that from a parallel study for the United States indicating a consistent and substantial negative impact of an immigrant labor supply shock on native competitors.

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    File URL: http://ftp.iza.org/dp1875.pdf
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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1875.

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    Length: 33 pages
    Date of creation: Dec 2005
    Date of revision:
    Handle: RePEc:iza:izadps:dp1875

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    Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
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    Web page: http://www.iza.org

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    Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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    Related research

    Keywords: skill groups; labor market effects of immigration; wage elasticity; Germany;

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    References

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    1. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    2. George J. Borjas, 1987. "Immigrants, minorities, and labor market competition," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 40(3), pages 382-392, April.
    3. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," NBER Working Papers 3069, National Bureau of Economic Research, Inc.
    4. Finis Welch, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," UCLA Economics Working Papers 146, UCLA Department of Economics.
    5. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc.
    6. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1991. "On the Labor Market Effects of Immigration and Trade," NBER Working Papers 3761, National Bureau of Economic Research, Inc.
    7. George E. Johnson, 1980. "The labor market effects of immigration," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 33(3), pages 331-341, April.
    8. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
    9. Welch, Finis, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S65-97, October.
    10. George J. Borjas, 1987. "Immigrants, Minorities, and Labor Market Competition," NBER Working Papers 2028, National Bureau of Economic Research, Inc.
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