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

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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.
FrÃ¶lich, Markus

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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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Paper provided by ZEW - Zentrum fÃ¼r EuropÃ¤ische 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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Paper
- Fröhlich, Markus & Puhani, Patrick A, 2002. "Immigration and Heterogeneous Labour in Western Germany: A Labour Market Classification Based on Nonparametric Estimation," CEPR Discussion Papers 3158, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Frölich, Markus & Puhani, Patrick A., 2002. "Immigration and Heterogeneous Labor in Western Germany A Labor Market Classification Based on Nonparametric Estimation," IZA Discussion Papers 418, Institute for the Study of Labor (IZA). [Downloadable!]

Find related papers by JEL classification:
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

References listed on IDEAS
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