The Labor Market Impact of Immigration in Western Germany in the 1990's

Francesco D'Amuri, Gianmarco I.P. Ottaviano, Giovanni Peri

NBER Working Paper No. 13851
Issued in March 2008, Revised in December 2011
NBER Program(s):International Trade and Investment Program, Labor Studies Program

We adopt a general equilibrium approach in order to measure the effects of recent immigration on the Western German labor market, looking at both wage and employment effects. Using the Regional File of the IAB Employment Subsample for the period 1987-2001, we find that the substantial immigration of the 1990's had no adverse effects on native wages and employment levels. It had instead adverse employment and wage effects on previous waves of immigrants. This stems from the fact that, after controlling for education and experience levels, native and migrant workers appear to be imperfect substitutes whereas new and old immigrants exhibit perfect substitutability. Our analysis suggests that if the German labor market were as 'flexible' as the UK labor market, it would be more efficient in dealing with the effects of immigration.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w13851

Published: D'Amuri, Francesco & Ottaviano, Gianmarco I.P. & Peri, Giovanni, 2010. "The labor market impact of immigration in Western Germany in the 1990s," European Economic Review, Elsevier, vol. 54(4), pages 550-570, May. citation courtesy of

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