Immigration and Heterogeneous Labor in Western Germany - a Labor Market Classification Based on Nonparametric Estimation

Univ. of St. Gallen Economics Discussion Paper 2002-1; ZEW Discussion Paper No. 02-01

55 Pages Posted: 5 Feb 2002

See all articles by Markus Frölich

Markus Frölich

Universität Mannheim, Chair of Econometrics

Patrick A. Puhani

Leibniz Universität Hannover; University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research; IZA Institute of Labor Economics; Université Paris II - Panthéon-Assas

Multiple version iconThere are 3 versions of this paper

Date Written: January 2002

Abstract

This paper presents a methodology to identify net demand shocks as well as wage rigidities in heterogeneous labor markets on the basis of nonparametric regression. We show how this approach can be used to make suggestions for immigration policy in economies with labor market rigidities. In an application to western Germany it is demonstrated that nonparametric regression is feasible in higher dimensions with only a few thousand observations. In sum, labor markets able to absorb immigrants are characterized by above average age and by professional occupations. On the other hand, labor markets for young workers in service occupations are identified to exhibit rising unemployment due to wage rigidities and are therefore not recommended for immigration.

Keywords: wage, unemployment, migration, rigidity, nonparametric regression

JEL Classification: C14, J31, J61, J64, J68

Suggested Citation

Frölich, Markus and Puhani, Patrick A., Immigration and Heterogeneous Labor in Western Germany - a Labor Market Classification Based on Nonparametric Estimation (January 2002). Univ. of St. Gallen Economics Discussion Paper 2002-1; ZEW Discussion Paper No. 02-01, Available at SSRN: https://ssrn.com/abstract=298156 or http://dx.doi.org/10.2139/ssrn.298156

Markus Frölich (Contact Author)

Universität Mannheim, Chair of Econometrics ( email )

L7, 3-5
68131 Mannheim
D-Mannheim, 68131
Germany

HOME PAGE: http://froelich.vwl.uni-mannheim.de

Patrick A. Puhani

Leibniz Universität Hannover ( email )

Institut für Arbeitsökonomik
Koenigsworther Platz 1
30167 Hannover, DE 30167
Germany

University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research ( email )

Dufourstr. 48
St. Gallen, 9000
Switzerland
+41 71 224 2341 (Phone)
+41 71 224 2298 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Université Paris II - Panthéon-Assas

12 place du Pantheon
Paris cedex 06, 75231
France

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