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The Labor Market Impact of Immigration in Western Germany in the 1990’s

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  • D’Amuri, Francesco
  • Ottaviano, Gianmarco I.P.
  • Peri, Giovanni

Abstract

We adopt a general equilibrium approach in order to measure the effects of recent immigration on the Western German labor market, looking at both wage and employment effects. Using the Regional File of the IAB Employment Subsample for the period 1987-2001, we find that the substantial immigration of the 1990’s had no adverse effects on native wages and employment levels. It had instead adverse employment and wage effects on previous waves of immigrants. This stems from the fact that, after controlling for education and experience levels, native and migrant workers appear to be imperfect substitutes whereas new and old immigrants exhibit perfect substitutability. Our analysis suggests that if the German labor market were as ‘flexible’ as the UK labor market, it would be more efficient in dealing with the effects of immigration.

Suggested Citation

  • D’Amuri, Francesco & Ottaviano, Gianmarco I.P. & Peri, Giovanni, 2008. "The Labor Market Impact of Immigration in Western Germany in the 1990’s," Knowledge, Technology, Human Capital Working Papers 6384, Fondazione Eni Enrico Mattei (FEEM).
  • Handle: RePEc:ags:feemkt:6384
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    Keywords

    Labor and Human Capital;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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