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

52 Pages Posted: 19 Mar 2008 Last revised: 3 Aug 2010

See all articles by Gianmarco I.P. Ottaviano

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation

Francesco D’Amuri

Bank of Italy; University of Essex - Institute for Social and Economic Research (ISER)

Giovanni Peri

University of California, Davis - Department of Economics

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Date Written: March 2008

Abstract

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.

Suggested Citation

Ottaviano, Gianmarco I.P. and D’Amuri, Francesco and Peri, Giovanni, The Labor Market Impact of Immigration in Western Germany in the 1990's (March 2008). NBER Working Paper No. w13851. Available at SSRN: https://ssrn.com/abstract=1106577

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation ( email )

Via Gobbi 5
Milan, 20136
Italy

Francesco D’Amuri

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Giovanni Peri (Contact Author)

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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