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Immigration and Heterogeneous Labor in Western Germany: A Labor Market Classification Based on Nonparametric Estimation

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  • Puhani, Patrick A.
  • Frölich, Markus

Abstract

This paper presents a methodology to identify net demand shocks as well as wage rigidities in heterogeneous labor markets on the basis of nonparametric regression. We show how this approach can be used to make suggestions for immigration policy in economies with labor market rigidities. In an application to western Germany it is demonstrated that nonparametric regression is feasible in higher dimensions with only a few thousand observations. In sum, labor markets able to absorb immigrants are characterized by above average age and by professional occupations. On the other hand, labor markets for young workers in service occupations are identified to exhibit rising unemployment due to wage rigidities and are therefore not recommended for immigration. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 02-01.

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Date of creation: 2002
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Handle: RePEc:zbw:zewdip:896

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Keywords: wage; unemployment; migration; rigidity; nonparametric regression;

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  1. Heather Antecol & Deborah A. Cobb-Clark & Stephen J. Trejo, . "Immigration Policy and the Skills of Immigrants to Australia, Canada, and the United States," Claremont Colleges Working Papers 2001-26, Claremont Colleges.
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  3. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," Working Papers 633, Princeton University, Department of Economics, Industrial Relations Section..
  4. Gang, Ira N & Rivera-Batiz, Francisco L, 1994. "Labor Market Effects of Immigration in the United States and Europe: Substitution vs. Complementarity," Journal of Population Economics, Springer, vol. 7(2), pages 157-75.
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  8. Gozalo, Pedro & Linton, Oliver, 2000. "Local nonlinear least squares: Using parametric information in nonparametric regression," Journal of Econometrics, Elsevier, vol. 99(1), pages 63-106, November.
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  10. Fitzenberger, Bernd & Franz, Wolfgang, 1999. "Industry-Level Wage Bargaining: A Partial Rehabilitation--The German Experience," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 437-57, September.
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  13. Clemens Fuest & Marcel Thum, 1999. "Welfare Effects of Immigration in a Dual Labor Market," CESifo Working Paper Series 215, CESifo Group Munich.
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  15. Fuest, Clemens & Thum, Marcel, 2001. "Immigration and skill formation in unionised labour markets," European Journal of Political Economy, Elsevier, vol. 17(3), pages 557-573, September.
  16. Joseph G. Altonji & David Card, 1989. "The Effects of Immigration on the Labor Market Outcomes of Natives," NBER Working Papers 3123, National Bureau of Economic Research, Inc.
  17. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
  18. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, octubre-d.
  19. George J. Borjas & Richard B. Friedman & Lawrence F. Katz, 1997. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 1-90.
  20. Richard B. Freeman, 1982. "Crime and the Labor Market," NBER Working Papers 1031, National Bureau of Economic Research, Inc.
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