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Integrating the East: The Labour Market Effects of Immigration

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  • Bauer, Thomas
  • Zimmermann, Klaus F

Abstract

The paper evaluates the potential gains from labour immigration for the European Union. After a review of the East-West migration problem and recent western migration policies, governmentally controlled labour immigration is studied in a framework with unions, unemployment and heterogenous workers. The model predicts a decline in wages with unskilled and skilled immigration if both types of workers are complements. Only skilled migration reduces unemployment, however. This disequilibrium framework is calibrated using German data and compared with an equilibrium framework to study migration gains and distributional effects. If labour markets are in equilibrium, unskilled immigration will provide larger gains than skilled immigration, but the gains will be small, and partly at the expense of the group of labour that experiences no competitive threat. In the face of unskilled unemployment, unskilled immigration can result in large migration losses while skilled immigration can provide substantial migration gains.

Suggested Citation

  • Bauer, Thomas & Zimmermann, Klaus F, 1995. "Integrating the East: The Labour Market Effects of Immigration," CEPR Discussion Papers 1235, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1235
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    Cited by:

    1. Co, Catherine Y. & Gang, Ira N. & Yun, Myeong-Su, 1998. "Returns to Returning: Who Went Abroad and What Does it Matter?," IZA Discussion Papers 19, Institute for the Study of Labor (IZA).
    2. Wolfgang Pollan, "undated". "Estimating the Economic Effects of Immigration in a Not Strictly Segmented Labor Market. The Case of Germany and Austria," WIFO Working Papers 119, WIFO.
    3. Bauer, Thomas K. & Pereira, Pedro T. & Vogler, Michael & Zimmermann, Klaus F., 1998. "Portuguese Migrants in the German Labor Market: Performance and Self-Selection," IZA Discussion Papers 20, Institute for the Study of Labor (IZA).
    4. Amelie Constant & Klaus F. Zimmermann, 2005. "Immigrant Performance and Selective Immigration Policy: A European Perspective," National Institute Economic Review, National Institute of Economic and Social Research, vol. 194(1), pages 94-105, October.
    5. Di Bartolomeo, Anna & Di Bartolomeo, Giovanni, 2007. "Integration of migrants in Italy: A simple general and objective measure," MPRA Paper 4421, University Library of Munich, Germany.
    6. Sjef Ederveen & Richard Nahuis & Ashok Parikh, 2007. "Labour mobility and regional disparities: the role of female labour participation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 895-913, October.
    7. Zimmermann, Klaus F., 1999. "Ethnic German Migration since 1989 - Results and Perspectives/ Aussiedler seit 1989 - Bilanz und Perspektiven," IZA Discussion Papers 50, Institute for the Study of Labor (IZA).
    8. Hans-Werner Sinn & Christian Holzner & Wolfgang Meister & Wolfgang Ochel & Martin Werding, 2006. "Aktivierende Sozialhilfe 2006 - das Kombilohn-Modell des ifo Instituts," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 59(02), pages 06-27, January.
    9. Rotte, Ralph, 1998. "Sorties from the Fortress: The Current System of Anti-Immigration Policy in Germany," IZA Discussion Papers 13, Institute for the Study of Labor (IZA).
    10. Bauer, Thomas K. & Zimmermann, Klaus F., 1999. "Occupational Mobility of Ethnic Migrants," IZA Discussion Papers 58, Institute for the Study of Labor (IZA).
    11. Alho, Kari E., 2002. "Labour Markets and Immigration Connected to Enlargement," Discussion Papers 791, The Research Institute of the Finnish Economy.
    12. Fuest, Clemens & Thum, Marcel, 2001. "Immigration and skill formation in unionised labour markets," European Journal of Political Economy, Elsevier, vol. 17(3), pages 557-573, September.
    13. Klaus Zimmermann, 2005. "European Labour Mobility: Challenges and Potentials," De Economist, Springer, vol. 153(4), pages 425-450, December.
    14. Richard Nahuis & A. Parikh, 2002. "Factor mobility and regional disparities; east, west, home's best?," CPB Discussion Paper 4, CPB Netherlands Bureau for Economic Policy Analysis.
    15. Etzo, Ivan, 2008. "Internal migration and growth in Italy," MPRA Paper 8642, University Library of Munich, Germany.
    16. Etzo, Ivan, 2008. "Internal migration: a review of the literature," MPRA Paper 8783, University Library of Munich, Germany.
    17. Zimmermann, Klaus F., 2009. "Mobilitätspolitik in Europa," IZA Standpunkte 7, Institute for the Study of Labor (IZA).
    18. Venturini, Alessandra & Villosio, Claudia, 2002. "Are Immigrants Competing with Natives in the Italian Labour Market? The Employment Effect," IZA Discussion Papers 467, Institute for the Study of Labor (IZA).
    19. Velling, Johannes, 1995. "Die Arbeitserlaubnis als Instrument der Arbeitsmarktpolitik zur Steuerung internationaler Zuwanderung auf den Arbeitsmarkt," ZEW Discussion Papers 95-16, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    20. Joachim Ragnitz & Marcel Thum, 2007. "Zur Einführung von Mindestlöhnen: empirische Relevanz des Niedriglohnsektors," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(03), pages 36-39, June.
    21. Joachim Ragnitz & Marcel Thum, 2008. "Beschäftigungswirkungen von Mindestlöhnen - eine Erläuterung zu den Berechnungen des ifo Instituts," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(01), pages 16-20, January.
    22. Bauer, Thomas K. & Zimmermann, Klaus F., 2000. "Immigration Policy in Integrated National Economies," IZA Discussion Papers 170, Institute for the Study of Labor (IZA).
    23. Joachim Ragnitz & Marcel Thum, 2008. "Beschäftigungswirkungen von Mindestlöhnen : eine Erläuterung zu den Berechnungen des ifo-Instituts ; Wiederabdruck aus ifo-Schnelldienst Nr. 1/2008, 16-20," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(06), pages 62-66, March.
    24. Anzelika Zaiceva & Klaus F. Zimmermann, 2008. "Scale, diversity, and determinants of labour migration in Europe," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 428-452, Autumn.
    25. Joachim Ragnitz & Marcel Thum, 2007. "The empirical relevance of minimum wages for the low-wage sector," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(2), pages 35-37, July.

    More about this item

    Keywords

    Heterogenous Labour; Immigration Gains; Selective Migration Policy;

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • 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

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