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The Wage Impact of Immigration in Germany - New Evidence for Skill Groups and Occupations

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  • Steinhardt Max Friedrich

    (Hamburg Institute of International Economics (HWWI))

Abstract

This paper contributes to the ongoing debate regarding the appropriate approach to use in identifying the impact of immigration on native workers’ labor market outcomes. The initial regression analysis makes use of German administrative data and is based on the variation of foreign workers’ shares within education-experience cells over time. It confirms previous findings suggesting that immigration in Germany had no adverse impact on native wages. However, the paper highlights that in Germany immigrants and natives with similar education and experience are likely to work in different occupations. The subsequent analysis based on occupational clustering uses the same data and finds significant adverse wage effects for natives, particularly for those in basic service occupations. The paper argues, therefore, that an identification strategy based on formal education characteristics might lead to biased estimates if a country’s labor market is characterized by occupational segmentation of immigrants.

Suggested Citation

  • Steinhardt Max Friedrich, 2011. "The Wage Impact of Immigration in Germany - New Evidence for Skill Groups and Occupations," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-35, June.
  • Handle: RePEc:bpj:bejeap:v:11:y:2011:i:1:n:31
    DOI: 10.2202/1935-1682.2615
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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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