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Is there monopsonistic discrimination against immigrants? First evidence from linked employer employee data

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  • Jahn, Elke
  • Hirsch, Boris

Abstract

This 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 4.6 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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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century with number 65417.

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Date of creation: 2012
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Handle: RePEc:zbw:vfsc12:65417

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Cited by:
  1. de la Rica, Sara & Glitz, Albrecht & Ortega, Francesc, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," IZA Discussion Papers 7778, Institute for the Study of Labor (IZA).
  2. Panagiotis Nanos & Christian Schluter, 2013. "The Composition of Wage Differentials between Migrants and Natives," Papers 1306.1781, arXiv.org, revised Oct 2013.
  3. Briggs Depew & Peter Norlander & Todd A. Sorensen, . "Inter-Firm Mobility and Return Migration Patterns of Skilled Guest Workers," Departmental Working Papers, Department of Economics, Louisiana State University 2014-06, Department of Economics, Louisiana State University.
  4. Hirsch, Boris & Jahn, Elke J. & Schnabel, Claus, 2013. "The Cyclical Behaviour of Employers' Monopsony Power and Workers' Wages," IZA Discussion Papers 7776, Institute for the Study of Labor (IZA).
  5. Kuhn, Peter J. & Shen, Kailing, 2014. "Do Employers Prefer Undocumented Workers? Evidence from China's Hukou System," IZA Discussion Papers 8289, Institute for the Study of Labor (IZA).
  6. Eric Strobl & Frank Walsh, 2014. "Monopsony, Minimum Wages and Migration," Working Papers, Department of Research, Ipag Business School 2014-069, Department of Research, Ipag Business School.

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