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Immigration and Structural Change: Evidence from Post-war Germany

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  • Sebastian Braun, Michael Kvasnicka

Abstract

Does immigration accelerate sectoral change towards high-productivity sectors? This paper uses the mass displacement of ethnic Germans from Eastern Europe to West Germany after World War II as a natural experiment to study this question. A simple two-sector model of the economy, in which moving costs prevent the marginal product of labor to be equalized across sectors, predicts that immigration boosts output per worker by expanding the high-productivity sector, but decreases output per worker within a sector. Using German district-level data from before and after the war, we find strong empirical support for these predictions

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1778.

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Length: 39 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:kie:kieliw:1778

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Keywords: Immigration; sectoral change; output growth; post-war Germany;

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  1. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2010. "Meta-analyses of labour-market impacts of immigration: key conclusions and policy implications," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 28(5), pages 819-833, October.
  2. Rachel M. Friedberg & Jennifer Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 23-44, Spring.
  3. Thomas K. Bauer & Sebastian Braun & Michael Kvasnicka, 2013. "The Economic Integration of Forced Migrants: Evidence for Post‐War Germany," Economic Journal, Royal Economic Society, vol. 123, pages 998-1024, 09.
  4. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
  5. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
  6. Sebastian Braun & Toman Omar Mahmoud, 2011. "The Employment Effects of Immigration: Evidence from the Mass Arrival of German Expellees in Post-war Germany," Kiel Working Papers 1725, Kiel Institute for the World Economy.
  7. Barry Eichengreen & Albrecht Ritschl, 2008. "Understanding West German economic growth in the 1950s," Economic History Working Papers 22304, London School of Economics and Political Science, Department of Economic History.
  8. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
  9. Falck, Oliver & Heblich, Stephan & Link, Susanne, 2011. "The Evils of Forced Migration: Do Integration Policies Alleviate Migrants' Economic Situations?," IZA Discussion Papers 5829, Institute for the Study of Labor (IZA).
  10. Tam�s Vony�, 2012. "The bombing of Germany: the economic geography of war-induced dislocation in West German industry," European Review of Economic History, Oxford University Press, vol. 16(1), pages 97-118, February.
  11. Temin, Peter, 2002. "The Golden Age of European growth reconsidered," European Review of Economic History, Cambridge University Press, vol. 6(01), pages 3-22, April.
  12. Schündeln, Matthias, 2007. "Are Immigrants More Mobile Than Natives? Evidence from Germany," IZA Discussion Papers 3226, Institute for the Study of Labor (IZA).
  13. Broadberry, S. N., 1997. "Anglo-German productivity differences 1870 1990: A sectoral analysis," European Review of Economic History, Cambridge University Press, vol. 1(02), pages 247-267, August.
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