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Immigrants and Native Workers: New Analysis Using Longitudinal Employer-Employee Data

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  • Mette Foged
  • Giovanni Peri

Abstract

This paper makes progress on a long standing issue: what is the effect of unskilled immigrants on the labor market outcomes of similarly educated natives? Using the universe of individuals and firms in Denmark for the period 1991-2008 we follow natives over time tracking how their wage, employment and occupational choice responded to a large, exogenous inflow of immigrants. We focus on a largely unexplored inflow of non-European immigrants to Denmark, beginning in 1995 and driven by a sequence of international political crises in Bosnia, Somalia, Afghanistan and Iraq, and an economic crisis in Turkey. We find that an increased supply of non-EU immigrants in a Danish municipality pushed less educated native workers to pursue more complex and less manual-intensive occupations. This reallocation took place mainly through the movement of individuals across firms and resulted in higher or unchanged wages. Immigration increased the mobility of natives but did not increase their probability of unemployment.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19315.

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Date of creation: Aug 2013
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Handle: RePEc:nbr:nberwo:19315

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  1. David Card, 1996. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Working Papers 747, Princeton University, Department of Economics, Industrial Relations Section..
  2. Rachel M. Friedberg, 2001. "The Impact Of Mass Migration On The Israeli Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1373-1408, November.
  3. Malchow-Møller, Nikolaj & Munch, Jakob R. & Seidelin, Claus Aastrup & Skaksen, Jan Rose, 2013. "Immigrant Workers and Farm Performance: Evidence from Matched Employer-Employee Data," IZA Discussion Papers 7133, Institute for the Study of Labor (IZA).
  4. Giovanni Peri, 2009. "The Effect of Immigration on Productivity: Evidence from US States," NBER Working Papers 15507, National Bureau of Economic Research, Inc.
  5. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2012. "Does Labor Diversity Affect Firm Productivity?," IZA Discussion Papers 6973, Institute for the Study of Labor (IZA).
  6. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2012. "The Impact Of Immigration On The Structure Of Wages: Theory And Evidence From Britain," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 120-151, 02.
  7. Anna Damm, 2009. "Determinants of recent immigrants’ location choices: quasi-experimental evidence," Journal of Population Economics, Springer, vol. 22(1), pages 145-174, January.
  8. Joseph Altonji & David Card, 1989. "The Effects of Immigration on the Labor Market Outcome of Less-Skilled Natives," Working Papers 636, Princeton University, Department of Economics, Industrial Relations Section..
  9. Cattaneo, Cristina & Fiorio, Carlo V. & Peri, Giovanni, 2013. "What Happens to the Careers of European Workers When Immigrants "Take Their Jobs"?," IZA Discussion Papers 7282, Institute for the Study of Labor (IZA).
  10. William W. Olney, 2013. "Immigration And Firm Expansion," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 142-157, 02.
  11. Torben Dall Schmidt & Peter Sandholt Jensen, 2012. "Social networks and regional recruitment of foreign labour: Firm recruitment methods and spatial sorting in Denmark," Papers in Regional Science, Wiley Blackwell, vol. 91(4), pages 795-821, November.
  12. William Walker, 2012. "The Transitional Costs of Sectoral Reallocation: Evidence from the Clean Air Act and the Workforce," Working Papers 12-02, Center for Economic Studies, U.S. Census Bureau.
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