Immigrants and Native Workers: New Analysis Using Longitudinal Employer-Employee Data
This paper makes progress on a long standing issue: what is the effect of unskilled immigrants on the labor market outcomes of similarly educated natives? Using the universe of individuals and firms in Denmark for the period 1991-2008 we follow natives over time tracking how their wage, employment and occupational choice responded to a large, exogenous inflow of immigrants. We focus on a largely unexplored inflow of non-European immigrants to Denmark, beginning in 1995 and driven by a sequence of international political crises in Bosnia, Somalia, Afghanistan and Iraq, and an economic crisis in Turkey. We find that an increased supply of non-EU immigrants in a Danish municipality pushed less educated native workers to pursue more complex and less manual-intensive occupations. This reallocation took place mainly through the movement of individuals across firms and resulted in higher or unchanged wages. Immigration increased the mobility of natives but did not increase their probability of unemployment.
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An online appendix is available for this publication.
This paper was revised on March 10, 2014
Document Object Identifier (DOI): 10.3386/w19315
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