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Immigration and Structural Change: Evidence from Post-War Germany

  • Braun, Sebastian

    ()

    (Kiel Institute for the World Economy)

  • Kvasnicka, Michael

    ()

    (Otto-von-Guericke University Magdeburg)

Does immigration accelerate sectoral change towards high-productivity sectors? This paper uses the mass displacement of ethnic Germans from Eastern Europe to West Germany after World War II as a natural experiment to study this question. A simple two-sector model of the economy, in which moving costs prevent the marginal product of labor to be equalized across sectors, predicts that immigration boosts output per worker by expanding the high-productivity sector, but decreases output per worker within a sector. Using German district-level data from before and after the war, we find strong empirical support for these predictions.

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File URL: http://ftp.iza.org/dp6690.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6690.

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Length: 39 pages
Date of creation: Jun 2012
Date of revision:
Publication status: published in: Journal of International Economics, 2014, 93 (2), 253-269
Handle: RePEc:iza:izadps:dp6690
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  1. Thomas K. Bauer & Sebastian Braun & Michael Kvasnicka, 2011. "The Economic Integration of Forced Migrants – Evidence for Post-War Germany," Ruhr Economic Papers 0267, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Temin, Peter, 2002. "The Golden Age of European growth reconsidered," European Review of Economic History, Cambridge University Press, vol. 6(01), pages 3-22, April.
  3. Barry Eichengreen & Albrecht Ritschl, 2008. "Understanding West German economic growth in the 1950s," Economic History Working Papers 22304, London School of Economics and Political Science, Department of Economic History.
  4. Schündeln, Matthias, 2007. "Are Immigrants More Mobile Than Natives? Evidence from Germany," IZA Discussion Papers 3226, Institute for the Study of Labor (IZA).
  5. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2010. "Meta-analyses of labour-market impacts of immigration: key conclusions and policy implications," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 28(5), pages 819-833, October.
  6. Rachel M. Friedberg & J. Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Working Papers 95-5, Brown University, Department of Economics.
  7. Bauer, Thomas K. & Braun, Sebastian & Kvasnicka, Michael, 2011. "The Economic Integration of Forced Migrants: Evidence for Post-War Germany," IZA Discussion Papers 5855, Institute for the Study of Labor (IZA).
  8. Sari Pekkala, 2005. "Economic Impacts of Immigration: A Survey," Discussion Papers 362, Government Institute for Economic Research Finland (VATT).
  9. Broadberry, S. N., 1997. "Anglo-German productivity differences 1870 1990: A sectoral analysis," European Review of Economic History, Cambridge University Press, vol. 1(02), pages 247-267, August.
  10. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
  11. Falck, Oliver & Heblich, Stephan & Link, Susanne, 2011. "The Evils of Forced Migration: Do Integration Policies Alleviate Migrants' Economic Situations?," Stirling Economics Discussion Papers 2011-14, University of Stirling, Division of Economics.
  12. Braun, Sebastian & Omar Mahmoud, Toman, 2014. "The Employment Effects of Immigration: Evidence from the Mass Arrival of German Expellees in Postwar Germany," The Journal of Economic History, Cambridge University Press, vol. 74(01), pages 69-108, March.
  13. Tam�s Vony�, 2012. "The bombing of Germany: the economic geography of war-induced dislocation in West German industry," European Review of Economic History, Oxford University Press, vol. 16(1), pages 97-118, February.
  14. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
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