The labor market impact of immigration in Western Germany in the 1990s |
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Authors: | Francesco D&rsquo Amuri |
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Affiliation: | a Bank of Italy and ISER, University of Essex, UK b Bocconi University, FEEM and CEPR, Italy c University of California, Davis and NBER, USA |
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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. |
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Keywords: | Immigration Wages Labor market rigidities Employment |
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