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

46 Pages Posted: 11 Jun 2008

See all articles by Francesco D’Amuri

Francesco D’Amuri

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

Gianmarco I.P. Ottaviano

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

Giovanni Peri

University of California, Davis - Department of Economics

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 labour market were as 'flexible' as the UK labour market, it would be more efficient in dealing with the effects of immigration.

Keywords: Employment, Immigration, Skill Complementarities, Wages

JEL Classification: E24, F22, J31, J61

Suggested Citation

D’Amuri, Francesco and Ottaviano, Gianmarco I.P. and Peri, Giovanni, The Labour Market Impact of Immigration in Western Germany in the 1990's (March 2008). , Vol. , pp. -, 2008. Available at SSRN: https://ssrn.com/abstract=1141642

Francesco D’Amuri (Contact Author)

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

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

Giovanni Peri

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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