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

50 Pages Posted: 28 Oct 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

Multiple version iconThere are 3 versions of this paper

Date Written: September 8, 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 effcient in dealing with the effects of immigration.

Keywords: Immigration, Skill Complementarities, Employment, Wages

JEL Classification: E24, F22, J61, J31

Suggested Citation

D’Amuri, Francesco and Ottaviano, Gianmarco I.P. and Peri, Giovanni, The Labor Market Impact of Immigration in Western Germany in the 1990's (September 8, 2008). Bank of Italy Temi di Discussione (Working Paper) No. 687. Available at SSRN: https://ssrn.com/abstract=1290521 or http://dx.doi.org/10.2139/ssrn.1290521

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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