Migration and the Wage-Settings Curve: Reassessing the Labor Market Effects of Migration
Year: 2008
Type: preprint
Study design: Observational Study
Abstract: Germany on basis of a wage-setting curve. The wage-setting curve relies on the assumption that wages respond to a hange in the unemployment rate, albeit imperfectly. This allows one to derive the wage and employment effects of migration simultaneously in a general equilibrium framework. Using administrative micro data we find that the elasticity of the wage-setting curve is particularly high for young workers and workers with an 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 0.1 percent in the short run. While native workers benefit from increased wages and lower unemployment, foreign workers are adversely affected.
Authors: Herbert Brücker, Elke J. Jahn
Language: English
Topic: Migration and Labor Dynamics
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
Funder: European Commission
OpenAlex ID: W1523900822