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Migration and Wage-Setting: Reassessing the Labor Market Effects of Migration

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Author Info
Herbert Brücker
Elke J. Jahn

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Abstract

This paper employs a wage-setting approach to analyze the labor market effects of immigration into Germany. The wage-setting framework relies on the assumption that wages tend to decline with the unemployment rate, albeit imperfectly. This enables us to consider labor market rigidities, which are particularly relevant in Europe. We find that the elasticity of the wage-setting curve is particularly high for young and well-educated workers. The labor market effects of immigration are moderate: a 1 percent increase in the German labor force through immigration increases the unemployment rate by less than 0.1 percentage points and reduces wages by 0.1 percent

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File URL: http://www.ifw-members.ifw-kiel.de/publications/migration-and-wage-setting-reassessing-the-labor-market-effects-of-migration/BruckerFinal.pdf
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Publisher Info
Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1502.

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Length: 43 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:kie:kieliw:1502

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Related research
Keywords: Migration; wage-setting; labor markets; panel data;

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Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
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

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  4. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2006. "The Impact of Immigration on the Employment of Natives in Regional Labour Markets: A Meta-Analysis," IZA Discussion Papers 2044, Institute for the Study of Labor (IZA). [Downloadable!]
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  6. Gianmarco I.P. Ottaviano & Giovanni Peri, 2006. "Rethinking the Effects of Immigration on Wages," NBER Working Papers 12497, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Tito Boeri & Herbert Brücker, 2005. "Why are Europeans so tough on migrants?," Economic Policy, CEPR, CES, MSH, vol. 20(44), pages 629-703, October. [Downloadable!] (restricted)
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  13. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November. [Downloadable!] (restricted)
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  19. 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. [Downloadable!] (restricted)
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  20. Holger Bonin, 2005. "Wage and Employment Effects of Immigration to Germany: Evidence from a Skill Group Approach," IZA Discussion Papers 1875, Institute for the Study of Labor (IZA). [Downloadable!]
  21. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Blackwell Publishing, vol. 19(3), pages 421-450, 07. [Downloadable!] (restricted)
    Other versions:
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