Immigration and Structural Change – Evidence from Post-War Germany

41 Pages Posted: 3 Aug 2012

See all articles by Sebastian Braun

Sebastian Braun

Kiel Institute for the World Economy - IFW

Michael Kvasnicka

RWI Essen (Berlin Office)

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2012

Abstract

Does immigration accelerate sectoral change towards high-productivity sectors? This paper uses the mass displacement of ethnic Germans from Eastern Europe to West Germany after World War II as a natural experiment to study this question. A simple two-sector model of the economy, in which moving costs prevent the marginal product of labor to be equalized across sectors, predicts that immigration boosts output per worker by expanding the high-productivity sector, but decreases output per worker within a sector. Using German district-level data from before and after the war, we find strong empirical support for these predictions.

Keywords: Immigration, sectoral change, output growth, post-war Germany

JEL Classification: J61, J21, C36, N34

Suggested Citation

Braun, Sebastian Till and Kvasnicka, Michael, Immigration and Structural Change – Evidence from Post-War Germany (June 1, 2012). Ruhr Economic Paper No. 345. Available at SSRN: https://ssrn.com/abstract=2122482 or http://dx.doi.org/10.2139/ssrn.2122482

Sebastian Till Braun (Contact Author)

Kiel Institute for the World Economy - IFW ( email )

United States

Michael Kvasnicka

RWI Essen (Berlin Office) ( email )

Hohenzollernstr. 1-3
Berlin, 45128
Germany

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