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Title:Is there monopsonistic discrimination against immigrants? First evidence from linked employer-employee data PDF Logo
Authors:Hirsch, Boris
Jahn, Elke J.
Issue Date:2012
Series/Report no.:Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6472
Abstract: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 4.7 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.
Subjects:monopsony
native-immigrant wage differential
discrimination
Germany
JEL:J42
J61
J71
Persistent Identifier of the first edition:urn:nbn:de:101:1-2012080812090
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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