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Restrictive Immigration Policy in Germany: Pains and Gains Foregone?

In: European Economic Integration, WTO Membership, Immigration and Offshoring

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  • Gabriel Felbermayr
  • Wido Geis
  • Wilhelm Kohler

Abstract

Many European countries restrict immigration from new EU member countries. The rationale is to avoid adverse wage and employment effects. We quantify these effects for Germany. Following Borjas (in Q J Econ CXVIII(4): 1335–1374, 2003), we estimate a structural model of labor demand, based on elasticities of substitution between workers with different experience levels and education. We allow for unemployment which we model in a price-wage-setting framework. Simulating a counterfactual scenario without restrictions for migration from new EU members countries in Germany, we find moderate negative wage and employment effects for incumbent foreigners, but positive effects for natives. Our results indicate that for the native German population as a whole the immigration restrictions are not welfare enhancing.

Suggested Citation

  • Gabriel Felbermayr & Wido Geis & Wilhelm Kohler, 2014. "Restrictive Immigration Policy in Germany: Pains and Gains Foregone?," World Scientific Book Chapters,in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 12, pages 395-419 World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789814440196_0012
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    1. Manacorda, Marco & Manning, Alan & Wadsworth, Jonathan, 2006. "The impact of immigration on the structure of male wages: theory and evidence from Britain," LSE Research Online Documents on Economics 19797, London School of Economics and Political Science, LSE Library.
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    9. Gabriel J Felbermayr & Wilhelm Kohler, 2014. "Immigration and Native Welfare," World Scientific Book Chapters,in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 10, pages 335-372 World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    2. Michael Gerfin & Boris Kaiser, 2010. "The Effects of Immigration on Wages: An Application of the Structural Skill-Cell Approach," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 709-739, December.
    3. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect ?," FSES Working Papers 436, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    4. Joël MACHADO, 2012. "On the welfare impacts of an immigration amnesty," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. Vallizadeh, Ehsan & Muysken, Joan & Ziesemer, Thomas, 2013. "Migration, unemployment, and skill downgrading : a specific-factors approach," IAB Discussion Paper 201313, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. D'Amuri, Francesco & Ottaviano, Gianmarco I.P. & Peri, Giovanni, 2010. "The labor market impact of immigration in Western Germany in the 1990s," European Economic Review, Elsevier, vol. 54(4), pages 550-570, May.
    7. Edo Anthony, 2015. "The Impact of Immigration on Native Wages and Employment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1151-1196, July.
    8. Enzo Weber & Roland Weigand, 2018. "Identifying macroeconomic effects of refugee migration to Germany," Economics Bulletin, AccessEcon, vol. 38(2), pages 852-862.
    9. Daniel Heuermann, 2011. "Human Capital Externalities in Western Germany," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(2), pages 139-165.
    10. Muysken, Joan & Vallizadeh, Ehsan & Ziesemer, Thomas, 2012. "The impact of Medium-Skilled immigration: A general equilibrium approach," MERIT Working Papers 055, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Muysken, Joan & Vallizadeh, Ehsan & Ziesemer, Thomas, 2012. "Migration, Unemployment, and Over-qualification: A Specific Factors-Model Approach," EconStor Preprints 67479, ZBW - German National Library of Economics.
    12. repec:wfo:wstudy:35641 is not listed on IDEAS
    13. TOMIURA Eiichi & ITO Banri & MUKUNOKI Hiroshi & WAKASUGI Ryuhei, 2017. "Individual Characteristics, Behavioral Biases, and Attitudes toward Immigration: Evidence from a survey in Japan," Discussion papers 17033, Research Institute of Economy, Trade and Industry (RIETI).
    14. Iftikhar, Zainab & Zaharieva, Anna, 2016. "General equilibrium effects of immigration in Germany: search and matching approach," Center for Mathematical Economics Working Papers 568, Center for Mathematical Economics, Bielefeld University.
    15. Akira Shimada, 2013. "Wage Inequality and Human Capital Formation under Migration Possibilities," Australian Economic Papers, Wiley Blackwell, vol. 52(3-4), pages 190-201, December.
    16. Anthony Edo & Hillel Rapoport, 2017. "Minimum Wages and the Labor Market Effects of Immigration," Working Papers 2017-12, CEPII research center.
    17. Michele Battisti & Gabriel Felbermayr, 2015. "Migranten im deutschen Arbeitsmarkt: Löhne, Arbeitslosigkeit, Erwerbsquoten," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 68(20), pages 39-47, October.
    18. 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).
    19. Edo, Anthony & Toubal, Farid, 2017. "Immigration and the gender wage gap," European Economic Review, Elsevier, vol. 92(C), pages 196-214.
    20. Anthony Edo, 2016. "How do rigid labor markets absorb immigration? Evidence from France," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.
    21. Anthony Edo & Farid Toubal, 2015. "Selective Immigration Policies and Wages Inequality," Review of International Economics, Wiley Blackwell, vol. 23(1), pages 160-187, February.
    22. Luca Barbone & Andrew Dabalen, 2009. "Enhancing the development impact of migration," Bank i Kredyt, Narodowy Bank Polski, vol. 40(6), pages 59-76.

    More about this item

    Keywords

    Economic Integration; WTO Membership; Immigration; Offshoring; European Union; International Trade; Migration; Gravity; Germany; Equilibrium; Tariff Liberalization; Commercial Policy; Eastern Enlargement;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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