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Native Wage Impacts of Foreign Labor

Author

Listed:
  • John P. Haisken-DeNew

    (SELAPO (University of Munich))

  • Klaus F. Zimmermann

    (SELAPO (University of Munich) and CEPR (London))

Abstract

Natives often fear labor market competition of foreigners, as they may induce declining wages and rising unemployment as in the case of natives and immigrants being substitutes. However, there is also the potential that they are complements, producing positive wage and employment effects. This issue is examined in a framework with two types of labor, such that low qualified native and immigrant workers (blue collar), although substitutes for one another, are potentially complements to high qualified native workers (white collar). This is thought to accurately reflect the past West German immigration experience. Examining the wage functions of white and blue collar natives in a random effects panel model using a vast sample of micro data, we actually find that foreigners negatively affect the wages of Germans on the whole. Relatively small gains are made by white collar employees with less than 20 years experience, but these are outweighed by the larger negative effects experienced by blue collar employees.

Suggested Citation

  • John P. Haisken-DeNew & Klaus F. Zimmermann, "undated". "Native Wage Impacts of Foreign Labor," Working Papers 9408, SELAPO Center for Human Resources.
  • Handle: RePEc:wop:selapo:9408
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    File URL: ftp://ftp.selapo.vwl.uni-muenchen.de/pub/Archiv/94-08.ps.gz
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    Citations

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    Cited by:

    1. Michael Gerfin & Boris Kaiser, 2010. "The Effects of Immigration on Wages: An Application of the Structural Skill-Cell Approach," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 709-739, December.
    2. D'Amuri, Francesco & Ottaviano, Gianmarco I.P. & Peri, Giovanni, 2010. "The labor market impact of immigration in Western Germany in the 1990s," European Economic Review, Elsevier, vol. 54(4), pages 550-570, May.
    3. Haisken-DeNew, John P. & Sinning, Mathias, 2007. "Social Deprivation and Exclusion of Immigrants in Germany," Ruhr Economic Papers 31, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Thomas K. Bauer & Regina Flake & Mathias G. Sinning, 2013. "Labor Market Effects of Immigration: Evidence from Neighborhood Data," Review of International Economics, Wiley Blackwell, vol. 21(2), pages 370-385, May.
    5. Hainmueller, Jens & Hiscox, Michael J., 2007. "Educated Preferences: Explaining Attitudes Toward Immigration in Europe," International Organization, Cambridge University Press, vol. 61(02), pages 399-442, April.
    6. DeVoretz, Don J. & Laryea, Samuel A., 1999. "Canadian Immigration Experience: Any Lessons for Europe?," IZA Discussion Papers 59, Institute for the Study of Labor (IZA).
    7. Cebreros Zurita Carlos Alfonso;Chiquiar Daniel;Roa Mónica;Tobal Martín, 2017. "Notes to Understand Migration Policy with International Trade Theoretical Tools," Working Papers 2017-03, Banco de México.
    8. Braakmann Nils & Wildman John & Waqas Muhammad, 2017. "Are Immigrants in Favour of Immigration? Evidence from England and Wales," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(1), pages 1-16, February.
    9. Fertig, Michael, 2003. "Migration to Germany: Research questions and first results," RWI Materialien 4, RWI - Leibniz-Institut für Wirtschaftsforschung.
    10. Ortega, Javier & Verdugo, Gregory, 2016. "Moving Up or Down? Immigration and the Selection of Natives across Occupations and Locations," IZA Discussion Papers 10303, Institute for the Study of Labor (IZA).
    11. Bonin, Holger, 2017. "Report No. 75: The Potential Economic Benefits of Education of Migrants in the EU," IZA Research Reports 75, Institute for the Study of Labor (IZA).
    12. Gottlieb, Daniel, 2002. "The Effect of Migrant Workers on Employment,Real Wages and Inequality The Case of Israel -1995 to 2000," MPRA Paper 3148, University Library of Munich, Germany.
    13. Yaya, Mehmet-Erdem, 2005. "Immigration, Trade and Wages in Germany," MPRA Paper 505, University Library of Munich, Germany, revised Jun 2006.
    14. Matthias Schündeln, 2014. "Are Immigrants More Mobile Than Natives? Evidence From Germany," Journal of Regional Science, Wiley Blackwell, vol. 54(1), pages 70-95, January.

    More about this item

    Keywords

    Earnings Function; Immigration; and Random Effects Panel Models;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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