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Immigration and the Earnings of Young Native Workers

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  • Winter-Ebmer, Rudolf
  • Zweimüller, Josef

Abstract

One of the most controversial aspects of immigration policy is the impact of foreigners on labour market outcomes of natives. Simple labour supply analysis demonstrates that these effects depend upon whether immigrants and natives act as substitutes or complements. In the first part of the study we attempt to replicate existing studies with Austrian data. In the second part we offer a further argument for a potential detrimental effect of immigration: if wages are negotiated at the firm level and migrant workers are less strike-prone, the bargaining power of workers will be lower the higher the share of foreign workers in the firm. Employing many immigrants in the firm, on the other hand, may also have an increasing effect on the wage rates of natives: within a two-tier wage system more outsiders create additional rents which can be shared among native insiders and their employers. The results show no negative impact of foreign labour on young natives' earnings levels either in a regional or sectoral respect and at the firm level. The results for earnings growth in the period 1988--91 are mixed. For job changers a rise in the share of foreign workers tends to be positive, whereas for workers staying with the same firm we find significant negative effects.

Suggested Citation

  • Winter-Ebmer, Rudolf & Zweimüller, Josef, 1994. "Immigration and the Earnings of Young Native Workers," CEPR Discussion Papers 936, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:936
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    References listed on IDEAS

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    1. Thisse, Jacques-Francois & Wildasin, David E., 1992. "Public facility location and urban spatial structure : Equilibrium and welfare analysis," Journal of Public Economics, Elsevier, pages 83-118.
    2. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, November.
    3. Masahisa Fujita & Jacques-François Thisse, 1986. "Spatial Competition with a Land Market: Hotelling and Von Thunen Unified," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 819-841.
    4. Thisse, Jacques-Francois, 1993. "Oligopoly and the polarization of space," European Economic Review, Elsevier, pages 299-307.
    5. Kanemoto, Yoshitsugu, 1980. "Theories of urban externalities," MPRA Paper 24614, University Library of Munich, Germany.
    6. Fujita, Masahisa & Thisse, Jacques-Francois, 1991. "Spatial duopoly and residential structure," Journal of Urban Economics, Elsevier, vol. 30(1), pages 27-47, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Earnings; Immigration; Native Workers;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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