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

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  • Holger Bonin

    () (IZA Bonn)

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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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    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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    Related research

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

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    References

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    1. 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.
    2. Finis Welch, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," UCLA Economics Working Papers 146, UCLA Department of Economics.
    3. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," Working Papers 633, Princeton University, Department of Economics, Industrial Relations Section..
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. George J. Borjas, 1987. "Immigrants, Minorities, and Labor Market Competition," NBER Working Papers 2028, National Bureau of Economic Research, Inc.
    9. 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.
    10. George J. Borjas, 2003. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1335-1374, November.
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    Cited by:
    1. Steinhardt, Max Friedrich, 2009. "The wage impact of immigration in Germany: New evidence for skill groups and occupations," HWWI Research Papers 1-23, Hamburg Institute of International Economics (HWWI).
    2. Gordon H. Hanson, 2008. "The Economic Consequences of the International Migration of Labor," NBER Working Papers 14490, National Bureau of Economic Research, Inc.
    3. Longhi, Simonetta & Nijkamp, Peter & Poot, Jacques, 2008. "Meta-Analysis of Empirical Evidence on the Labour Market Impacts of Immigration," IZA Discussion Papers 3418, Institute for the Study of Labor (IZA).
    4. Ortega, J. & Verdugo, G., 2011. "Immigration and the Occupational Choice of Natives: a Factor Proportions Approach," Working papers 335, Banque de France.
    5. Véronique Rémy & Bertrand Lhommeau, 2009. "Les politiques d’allégements ont-elles un effet sur la mobilité salariale des travailleurs à bas salaire ?," Économie et Statistique, Programme National Persée, vol. 429(1), pages 21-49.
    6. Gabriele Tondl & Peter Huber, 2011. "Migration and Regional Convergence in the European Union," ERSA conference papers ersa11p1761, European Regional Science Association.
    7. Herbert Brücker & Elke J. Jahn, 2009. "Migration and Wage-Setting: Reassessing the Labor Market Effects of Migration," Kiel Working Papers 1502, Kiel Institute for the World Economy.
    8. Steinhardt, Max Friedrich, 2006. "Arbeitsmarkt und Migration: Eine empirische Analyse der Lohn- und Beschäftigungseffekte der Zuwanderung für Deutschland," HWWI Research Papers 3-4, Hamburg Institute of International Economics (HWWI).
    9. Albrecht Glitz, 2006. "The Labour Market Impact of Immigration: Quasi-Experimental Evidence," CReAM Discussion Paper Series 0612, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

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