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The Returns to International Migration in a Free Mobility Setting: Evidence from Austria and Germany

Author

Listed:
  • Andrea Weber
  • David Card
  • Wolfgang Dauth
  • Wolfgang Frimmel
  • Julia Schmieder
  • Rudolf Winter-Ebmer

Abstract

How big are the gains to international migration, and how do they vary across migrants? We use linked administrative data for Austria and Germany, focusing on migrants who were steadily employed 2-4 years before moving and their former co-workers as a comparison group in a difference-in-differences design. Combining origin- and destination-country data for five years after migration allows us to assess gains for both migrants who remain abroad and those who return. Austrian migrants to Germany experience an immediate and persistent increase of around 13% in daily wages relative to their matched co-workers, while German migrants to Austria gain about 4%. The higher returns for Austrians are mainly driven by higher average wages in Germany rather than differential selection. Consistent with a dynamic learning model, returns are largest for migrants who remain in the destination, smaller for those returning after 1-4 years, and zero for those returning within a year. To interpret these findings, we conduct a parallel analysis of domestic migrants moving to a larger city (Vienna or one of Germany's five largest cities). These "big-city" movers experience wage gains of about 5% in Austria and 10% in Germany.

Suggested Citation

  • Andrea Weber & David Card & Wolfgang Dauth & Wolfgang Frimmel & Julia Schmieder & Rudolf Winter-Ebmer, 2026. "The Returns to International Migration in a Free Mobility Setting: Evidence from Austria and Germany," RFBerlin Discussion Paper Series 26250, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:26250
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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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