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Immigration and Heterogeneous Labor in Western Germany

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Author Info

  • Frölich, Markus

    () (University of Mannheim)

  • Puhani, Patrick A.

    () (University of Hannover)

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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Bibliographic 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: 55 pages
Date of creation: Jan 2002
Date of revision:
Publication status: published as 'Developing an immigration policy for Germany on the basis of a nonparametric labor market classification' in: Allgemeines Statistisches Archiv /Journal of the German Statistical Society, 2004, 88(1), 1-22
Handle: RePEc:iza:izadps:dp418

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Related research

Keywords: migration; Wage; rigidity; nonparametric regression; unemployment;

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References

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  1. Antecol, Heather & Cobb-Clark, Deborah A. & Trejo, Stephen, 2001. "Immigration Policy and the Skills of Immigrants to Australia, Canada, and the United States," IZA Discussion Papers 363, Institute for the Study of Labor (IZA).
  2. Angrist, Joshua D, 1996. "Short-Run Demand for Palestinian Labor," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 425-53, July.
  3. Daron Acemoglu, 2002. "Cross-Country Inequality Trends," NBER Working Papers 8832, National Bureau of Economic Research, Inc.
  4. Jianqing Fan & Theo Gasser & Irène Gijbels & Michael Brockmann & Joachim Engel, 1997. "Local Polynomial Regression: Optimal Kernels and Asymptotic Minimax Efficiency," Annals of the Institute of Statistical Mathematics, Springer, vol. 49(1), pages 79-99, March.
  5. Zimmermann, Klaus F, 1993. "Native Wage Impacts of Foreign Labour: A Random Effects Panel Analysis," CEPR Discussion Papers 851, C.E.P.R. Discussion Papers.
  6. 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..
  7. David Card & Francis Kramarz & Thomas Lemieux, 1995. "Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France," Working Papers 734, Princeton University, Department of Economics, Industrial Relations Section..
  8. George J. Borjas & Richard B. Friedman & Lawrence F. Katz, 1997. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 1-90.
  9. Joseph G. Altonji & David Card, 1989. "The Effects of Immigration on the Labor Market Outcomes of Natives," NBER Working Papers 3123, National Bureau of Economic Research, Inc.
  10. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, October.
  11. Brecher, Richard A. & Choudhri, Ehsan U., 1987. "International migration versus foreign investment in the presence of unemployment," Journal of International Economics, Elsevier, vol. 23(3-4), pages 329-342, November.
  12. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
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