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

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

Author Info

Frölich, Markus (SIAW, University of St. Gallen)
Puhani, Patrick A. () (MIT, Cambridge, SIAW, University of St. Gallen, CEPR, London, ZEW, Mannheim, WDI, University of Michigan Business School and IZA, Bonn)

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Abstract

This paper presents a methodology to identify net demand shocks as well as wage rigidities in heterogeneous labor markets on the basis of nonparametric regression. We show how this approach can be used to make suggestions for immigration policy in economies with labor 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, labor markets able to absorb immigrants are characterized by above average age and by professional occupations. On the other hand, labor 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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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 418.

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Length: 54 pages
Date of creation: Jan 2002
Date of revision:
Handle: RePEc:iza:izadps:dp418

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Paper
- Fröhlich, Markus & Puhani, Patrick A, 2002. "Immigration and Heterogeneous Labour in Western Germany: A Labour Market Classification Based on Nonparametric Estimation," CEPR Discussion Papers 3158, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Puhani, Patrick A. & Frölich, Markus, 2002. "Immigration and Heterogeneous Labor in Western Germany : A Labor Market Classification Based on Nonparametric Estimation," ZEW Discussion Papers 02-01, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]

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

This paper has been announced in the following NEP Reports:

NEP-ALL-2004-02-10 (All new papers)
NEP-LAB-2002-02-15 (Labour Economics)
NEP-PKE-2002-02-15 (Post Keynesian Economics)

References listed on IDEAS
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