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Is there monopsonistic discrimination against immigrants? First evidence from linked employer employee data

Listed author(s):
  • Jahn, Elke
  • Hirsch, Boris

This paper investigates immigrants and natives labour supply to the firm within a semi-structural approach based on a dynamic monopsony framework. Applying duration models to a large administrative employer employee data set for Germany, we find that once accounting for unobserved worker heterogeneity immigrants supply labour less elastically to firms than natives. Under monopsonistic wage setting the estimated elasticity differential predicts a 4.6 log points wage penalty for immigrants thereby accounting for almost the entire unexplained native immigrant wage differential of 2.9 5.9 log points. Our results imply that discriminating against immigrants is profitable rather than costly.

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File URL: https://www.econstor.eu/bitstream/10419/65417/1/VfS_2012_pid_129.pdf
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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century with number 65417.

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Date of creation: 2012
Handle: RePEc:zbw:vfsc12:65417
Contact details of provider: Web page: http://www.socialpolitik.org/
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