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Do Immigrants Reduce Natives' Wages? Evidence from Germany

Author

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  • Thomas Bauer

    () (IZA, University of Bonn, & CEPR, London)

Abstract

This paper investigates the effects of immigration on the wages of native workers in Germany. The analysis differentiates native and foreign workers according to their occupational status. The estimation of a translog production using 1990 cross section data reveals mixed results regarding the production relationship between different native and foreign groups. However, the effects of immigration on the wages of natives are numerically very small. Separability tests show that the use of an aggregate index for foreign labor and the treatment of natives and foreigners as similar inputs is not appropriate.

Suggested Citation

  • Thomas Bauer, 1998. "Do Immigrants Reduce Natives' Wages? Evidence from Germany," Departmental Working Papers 199802, Rutgers University, Department of Economics.
  • Handle: RePEc:rut:rutres:199802
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    File URL: http://www.sas.rutgers.edu/virtual/snde/wp/1998-02.pdf
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    References listed on IDEAS

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    1. De New, John P & Zimmermann, Klaus F, 1994. "Native Wage Impacts of Foreign Labor: A Random Effects Panel Analysis," Journal of Population Economics, Springer;European Society for Population Economics, pages 177-192.
    2. John P. Haisken-DeNew & Klaus F. Zimmermann, "undated". "Wage and Mobility Effects of Trade and Migration," Working Papers _001, SELAPO Center for Human Resources.
    3. George J. Borjas, 1986. "Immigrants, Minorities, and Labor Market Competition," NBER Working Papers 2028, National Bureau of Economic Research, Inc.
    4. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    5. Pischke, Jörn-Steffen & Velling, Johannes, 1994. "Wage and Employment Effects of Immigration to Germany: An Analysis Based on Local Labour Markets," CEPR Discussion Papers 935, C.E.P.R. Discussion Papers.
    6. Jörn-Steffen Pischke & Johannes Velling, 1997. "Employment Effects Of Immigration To Germany: An Analysis Based On Local Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 594-604, November.
    7. Grossman, Jean Baldwin, 1982. "The Substitutability of Natives and Immigrants in Production," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 596-603, November.
    8. Sato, Ryuzo & Koizumi, Tetsunori, 1973. "On the Elasticities of Substitution and Complementarity," Oxford Economic Papers, Oxford University Press, vol. 25(1), pages 44-56, March.
    9. Gang, Ira N & Rivera-Batiz, Francisco L, 1994. "Labor Market Effects of Immigration in the United States and Europe: Substitution vs. Complementarity," Journal of Population Economics, Springer;European Society for Population Economics, vol. 7(2), pages 157-175.
    10. Licht, Georg & Steiner, Viktor, 1993. "Assimilation, labour market experience, and earnings profiles of temporary and permanent immigrant workers in germany," ZEW Discussion Papers 93-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Denny, Michael & Fuss, Melvyn A, 1977. "The Use of Approximation Analysis to Test for Separability and the Existence of Consistent Aggregates," American Economic Review, American Economic Association, vol. 67(3), pages 404-418, June.
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    Citations

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    Cited by:

    1. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Wiley Blackwell, pages 451-477.
    2. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2009. "Regional Economic Impacts of Immigration: A Review," Tinbergen Institute Discussion Papers 09-047/3, Tinbergen Institute, revised 23 Jul 2009.
    3. S. Longhi & P. Nijkamp & J. Poot, 2010. "Joint impacts of immigration on wages and employment: review and meta-analysis," Journal of Geographical Systems, Springer, vol. 12(4), pages 355-387, December.
    4. Herbert Brücker, 2003. "Die Arbeitsmarkteffekte der Ost-West-Migration: theoretische Überlegungen, Simulationen und empirische Befunde," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 72(4), pages 579-593.
    5. Simonetta LONGHI & Peter NIJKAMP & Jacques POOT, 2008. "Meta-Analysis Of Empirical Evidence On The Labour Market Impacts Of Immigration," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 161-191.
    6. Boeri, Tito & Brücker, Herbert, 2005. "Migration, Co-ordination Failures and EU Enlargement," IZA Discussion Papers 1600, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    immigration; separability; substitutability; wages;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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