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The labor market impact of immigration in Western Germany in the 1990s

D’Amuri, Francesco and Ottaviano, Gianmarco I. P. and Peri, Giovanni (2010) The labor market impact of immigration in Western Germany in the 1990s. European Economic Review, 54 (4). pp. 550-570. ISSN 0014-2921

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Identification Number: 10.1016/j.euroecorev.2009.10.002

Abstract

In this article we estimate the wage and employment effects of recent immigration in Western Germany. Using administrative data for the period 1987–2001 and a labor-market equilibrium model, we find that the substantial immigration of the 1990s had very little adverse effects on native wages and on their employment levels. Instead, it had a sizeable adverse employment effect on previous immigrants as well as a small adverse effect on their wages. These asymmetric results are partly driven by a higher degree of substitution between old and new immigrants in the labor market and in part by the rigidity of wages in less than flexible labor markets. In a simple counter-factual experiment we show that in a world of perfect wage flexibility and no unemployment insurance the wage-bill loss of old immigrants would be much smaller.

Item Type: Article
Official URL: http://www.journals.elsevier.com/european-economic...
Additional Information: © 2010 Elsevier
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
JEL classification: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation)
F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J61 - Geographic Labor Mobility; Immigrant Workers
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 20 Feb 2012 16:55
Last Modified: 02 Jun 2014 09:11
URI: http://eprints.lse.ac.uk/id/eprint/41966

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