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Restrictive Immigration Policy in Germany: Pains and Gains Foregone?

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Listed:
  • Gabriel Felbermayr
  • Wido Geis
  • Wilhelm Kohler
  • Gabriel J. Felbermayr

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.

Suggested Citation

  • Gabriel Felbermayr & Wido Geis & Wilhelm Kohler & Gabriel J. Felbermayr, 2008. "Restrictive Immigration Policy in Germany: Pains and Gains Foregone?," CESifo Working Paper Series 2316, CESifo.
    • Handle: RePEc:ces:ceswps:_2316
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    More about this item

    Keywords

    migration; labor;

    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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