Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/208553 
Year of Publication: 
2009
Series/Report no.: 
Working paper No. 7-2008
Publisher: 
Copenhagen Business School (CBS), Department of Economics, Frederiksberg
Abstract: 
In this paper, we propose and test a novel effect of immigration on the wages of native workers. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, the use of immigrants may also affect wage formation at the most disaggregate level – the workplace. Using linked employeremployee data, we find that an increased use of workers from less developed countries has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and IV. Additional evidence suggests that this effect works at least partly through a general effect on the wage norm in the firm of hiring employees with poor outside options (the immigrants).
JEL: 
D21
H32
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Working Paper

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