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Restrictive Immigration Policy in Germany: Pains and Gains Foregone?

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  • Gabriel J. 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 (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, we find moderate negative wage effects, combined with increased unemployment for some types of workers. Wage-setting mitigates wage cuts.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2316.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2316
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Keywords: migration; labor;

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Find related papers by JEL classification:
  • F20 - International Economics - - International Factor Movements and International Business - - - General
  • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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  1. 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..
  2. George J. Borjas, 1994. "The Economic Benefits from Immigration," NBER Working Papers 4955, National Bureau of Economic Research, Inc.
  3. Brücker, Herbert & Jahn, Elke J., 2008. "Migration and the Wage Curve: A Structural Approach to Measure the Wage and Employment Effects of Migration," IZA Discussion Papers 3423, Institute for the Study of Labor (IZA).
  4. D'Amuri, Francesco & Ottaviano, Gianmarco I. P. & Peri, Giovanni, 2008. "The labor market impact of immigration in Western Germany in the 1990's," HWWI Research Papers 3-12, Hamburg Institute of International Economics (HWWI).
  5. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2006. "The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain," CReAM Discussion Paper Series 0608, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  6. Blanchflower, David G. & Oswald, Andrew J., 2005. "The Wage Curve Reloaded," IZA Discussion Papers 1665, Institute for the Study of Labor (IZA).
  7. Abdurrahman Aydemir & George J. Borjas, 2007. "Cross-Country Variation in the Impact of International Migration: Canada, Mexico, and the United States," Journal of the European Economic Association, MIT Press, vol. 5(4), pages 663-708, 06.
  8. 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.
  9. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain The Rising Return To College For Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 705-746, May.
  10. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
  11. Zaiceva, Anzelika, 2006. "Reconciling the Estimates of Potential Migration into the Enlarged European Union," IZA Discussion Papers 2519, Institute for the Study of Labor (IZA).
  12. Giovanni Peri & Gianmarco I.P. Ottaviano, 2006. "Rethinking the Effects of Immigration on Wages," Working Papers 634, University of California, Davis, Department of Economics.
  13. Borjas, George J & Freeman, Richard B & Katz, Lawrence, 1996. "Searching for the Effect of Immigration on the Labor Market," American Economic Review, American Economic Association, vol. 86(2), pages 246-51, May.
  14. Felbermayr, Gabriel & Kohler, Wilhelm K., 2007. "Immigration and native welfare," Munich Reprints in Economics 20608, University of Munich, Department of Economics.
  15. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-94, Sept./Oct.
  16. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  17. Hans-Werner Sinn & Gebhard Flaig & Martin Werding & Sonja Munz & Nicola Düll & Herbert Hofmann, 2001. "EU-Erweiterung und Arbeitskräftemigration : Wege zu einer schrittweisen Annäherung der Arbeitsmärkte," ifo Beiträge zur Wirtschaftsforschung, Ifo Institute for Economic Research at the University of Munich, number 2, 04.
  18. Ethier, Wilfred J, 1985. "International Trade and Labor Migration," American Economic Review, American Economic Association, vol. 75(4), pages 691-707, September.
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Cited by:

  1. D'Amuri, Francesco & Ottaviano, Gianmarco I. P. & Peri, Giovanni, 2008. "The labor market impact of immigration in Western Germany in the 1990's," HWWI Research Papers 3-12, Hamburg Institute of International Economics (HWWI).
  2. Gianmarco I.P. Ottaviano & Giovanni Peri, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," NBER Working Papers 14188, National Bureau of Economic Research, Inc.
  3. Vallizadeh, Ehsan & Joan, Muysken & Thomas, Ziesemer, 2012. "The impact of medium-skilled immigration: a general equilibrium approach," MPRA Paper 40006, University Library of Munich, Germany.
  4. 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].
  5. Anthony Edo, 2013. "The Impact of Immigration on Native Wages and Employment," Documents de travail du Centre d'Economie de la Sorbonne 13064, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  6. Anthony Edo, 2013. "The Impact of Immigration on Native Wages and Employment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00881131, HAL.
  7. 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).
  8. 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.
  9. Sara de la Rica & Albretch Glitz & Francesc Ortega, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," Working Papers 2013-16, FEDEA.
  10. 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.
  11. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect?," IZA Discussion Papers 6975, Institute for the Study of Labor (IZA).

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