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Reservation Wages of First and Second Generation Migrants

Author

Listed:
  • Constant, Amelie F.

    (Temple University)

  • Krause-Pilatus, Annabelle

    (University of Bonn)

  • Rinne, Ulf

    (IZA)

  • Zimmermann, Klaus F.

    (University of Bonn)

Abstract

This paper analyzes the reservation wages of first and second generation migrants. Based on recently collected and rich survey data of a representative inflow sample into unemployment in Germany, we empirically test the hypothesis that reservation wages increase from first to second generation migrants. Two extensions of the basic job search model, namely an unknown wage offer distribution and different reference standards, provide theoretical justifications for this conjecture. In both extensions, changing frames of reference are identified as a channel through which the phenomenon of increasing reservation wages may arise. In as far as language skills or self-evaluated returns to characteristics reflect a person's frames of reference, we find empirical support for this mechanism to be present.

Suggested Citation

  • Constant, Amelie F. & Krause-Pilatus, Annabelle & Rinne, Ulf & Zimmermann, Klaus F., 2010. "Reservation Wages of First and Second Generation Migrants," IZA Discussion Papers 5396, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5396
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    Cited by:

    1. Rinne, Ulf & Schüller, Simone & Zimmermann, Klaus F., 2010. "Ethnische Vielfalt und Arbeitsmarkterfolg," IZA Standpunkte 34, Institute of Labor Economics (IZA).
    2. Stelios Roupakias, 2025. "Immigrant assimilation in the Greek labor market," International Journal of Manpower, Emerald Group Publishing Limited, vol. 46(5), pages 936-955, March.
    3. Annette Bergemann & Marco Caliendo & Gerard J. van den Berg & Klaus F. Zimmermann, 2011. "The threat effect of participation in active labor market programs on job search behavior of migrants in Germany," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(7), pages 777-795, October.
    4. Stephan Humpert & Christian Pfeifer, 2013. "Explaining age and gender differences in employment rates: a labor supply-side perspective [Eine Erklärung alters- und geschlechtsspezifischer Unterschiede in den Beschäftigungsquoten: Die Sicht de," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 46(1), pages 1-17, March.
    5. Gil Epstein & Odelia Heizler, 2014. "Ethnosizing Immigrants: A Theoretical Framework," RFBerlin Discussion Paper Series 1441, ROCKWOOL Foundation Berlin (RFBerlin).
    6. Patrick Arni & Marco Caliendo & Steffen Künn & Klaus Zimmermann, 2014. "The IZA evaluation dataset survey: a scientific use file," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    7. Deschacht, Nick & Vansteenkiste, Sarah, 2021. "The effect of unemployment duration on reservation wages: Evidence from Belgium," Labour Economics, Elsevier, vol. 71(C).
    8. Chletsos Michael & Roupakias Stelios, 2019. "Do Immigrants Compete with Natives in the Greek Labour Market? Evidence from the Skill-Cell Approach before and during the Great Recession," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-30, April.
    9. Constant, Amelie F. & Tien, Bienvenue N., 2011. "Germany's Immigration Policy and Labor Shortages," IZA Research Reports 41, Institute of Labor Economics (IZA).
    10. Fang, Tony & Xiao, Na & Zhu, Jane & Hartley, John, 2022. "Employer Attitudes and the Hiring of Immigrants and International Students: Evidence from a Survey of Employers in Canada," IZA Discussion Papers 15226, Institute of Labor Economics (IZA).
    11. Edo Anthony, 2015. "The Impact of Immigration on Native Wages and Employment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1151-1196, July.
    12. Amelie F. Constant & Martin Kahanec & Ulf Rinne & Klaus F. Zimmermann, 2011. "Ethnicity, job search and labor market reintegration of the unemployed," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(7), pages 753-776, October.
    13. Gil Epstein & Odelia Heizler (Cohen), 2015. "Ethnic identity: a theoretical framework," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-11, December.
    14. Anthony Edo, 2013. "The Impact of Immigration on Native Wages and Employment," Post-Print halshs-00881131, HAL.
    15. Anthony Edo, 2016. "How do rigid labor markets absorb immigration? Evidence from France," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.

    More about this item

    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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