Is There Monopsonistic Discrimination against Immigrants? First Evidence from Linked Employer-Employee Data
AbstractThis paper investigates immigrants' and natives' labour supply to the firm within a semi-structural approach based on a dynamic monopsony framework. Applying duration models to a large administrative employer–employee data set for Germany, we find that once accounting for unobserved worker heterogeneity immigrants supply labour less elastically to firms than natives. Under monopsonistic wage setting the estimated elasticity differential predicts a 4.7 log points wage penalty for immigrants thereby accounting for almost the entire unexplained native-immigrant wage differential of 2.9-5.9 log points. Our results imply that discriminating against immigrants is profitable rather than costly.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6472.
Length: 31 pages
Date of creation: Apr 2012
Date of revision:
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Other versions of this item:
- Jahn, Elke & Hirsch, Boris, 2012. "Is there monopsonistic discrimination against immigrants? First evidence from linked employer employee data," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 65417, Verein für Socialpolitik / German Economic Association.
- Hirsch, Boris & Jahn, Elke J., 2012. "Is there monopsonistic discrimination against immigrants? First evidence from linked employer-employee data," Discussion Papers 79, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-23 (All new papers)
- NEP-LAB-2012-04-23 (Labour Economics)
- NEP-LMA-2012-04-23 (Labor Markets - Supply, Demand, & Wages)
- NEP-MIG-2012-04-23 (Economics of Human Migration)
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- Panagiotis Nanos & Christian Schluter, 2013. "The Composition of Wage Differentials between Migrants and Natives," Papers 1306.1781, arXiv.org, revised Oct 2013.
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