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Title:Migration and the wage curve: a structural approach to measure the wage and employment effects of migration PDF Logo
Authors:Brücker, Herbert
Jahn, Elke J.
Issue Date:2008
Series/Report no.:IZA Discussion Papers 3423
Abstract:Based on a wage curve approach we examine the labor market effects of migration in Germany. The wage curve relies on the assumption that wages respond to a change in the unemployment rate, albeit imperfectly. This allows one to derive the wage and employment effects of migration simultaneously in a general equilibrium framework. For the empirical analysis we employ the IABS, a two percent sample of the German labor force. We find that the elasticity of the wage curve is particularly high for young workers and workers with a university degree, while it is low for older workers and workers with a vocational degree. The wage and employment effects of migration are moderate: a 1 percent increase in the German labor force through immigration increases the aggregate unemployment rate by less than 0.1 percentage points and reduces average wages by less 0.1 percent. While native workers benefit from increased wages and lower unemployment, foreign workers are adversely affected.
Subjects:Migration
wage curve
labor demand
panel data
JEL:F22
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008040189
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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