Restrictive immigration policy in Germany: pains and gains foregone?

Many European countries restrict immigration from new EU member countries. The rationale is to avoid adverse wage and employment effects. We quantify these effects for Germany. Following Borjas (in Q J Econ CXVIII(4):1335–1374, 2003), we estimate a structural model of labor demand, based on elasticities of substitution between workers with different experience levels and education. We allow for unemployment which we model in a price-wage-setting framework. Simulating a counterfactual scenario without restrictions for migration from new EU members countries in Germany, we find moderate negative wage and employment effects for incumbent foreigners, but positive effects for natives. Our results indicate that for the native German population as a whole the immigration restrictions are not welfare enhancing.     

Comparing survey data with an official administrative population: assessing sample-selectivity in the IAB Establishment Panel

The IAB Establishment Panel is a large annual establishment survey and serves as a data source for many empirical analyzes, e.g., on labor demand, wages and industrial relations but also for influential policy evaluations. We analyze the selectivity of the IAB Establishment Panel compared with the administrative population of all establishments in Germany to test whether the IAB Establishment Panel is biased towards “good employers”. By design the survey over-samples large, thus high paying and stable establishments. After flexibly controlling for elements of the sampling design, we do not detect any meaningful difference between establishments participating in the survey and the full population regarding key economic performance indicators. If anything, we observe a slight overrepresentation of stable and slow growing establishments. For applied research, the results highlight that “typical” econometric specifications may not be sufficient to control for selectivity.

     

How do Migrants Choose Their Destination Country? An Analysis of Institutional Determinants

We analyze the effects of socio‐economic and institutional determinants, especially labor‐market institutions and features of social protection systems, on migrants’ location choices. Based on micro‐data for France, Germany, the UK, and the USA, we study migration to one of these four countries using a multinomial choice framework. Our estimates confirm conventional results regarding wages, networks, and unemployment rates. In addition, we find that there are indications of “insider–outsider effects” for union coverage and unemployment benefits, while employment protection does not have a clear‐cut impact on migration. Good education and health systems tend to attract migrants, while generous pension systems deter them.