Unskilled Labor and Wage Determination: An Empirical Investigation for Germany

JOURNAL OF POPULATION ECONOMICS, Vol. 9, Issue 2

Posted: 4 May 1998

See all articles by Rainer Winkelmann

Rainer Winkelmann

University of Zurich - Statistics and Empirical Economic Research; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Abstract

This article contributes to the ongoing debate on native wage impacts of immigration. I propose a mobile-fixed factor distinction as a framework in which to think about the differential impact of immigration on various labor market groups. Skilled workers are treated as a fixed factor of production since the strong reliance on skill certification in Germany inhibits mobility and shelters from competition. Unskilled workers, in contrast, receive competitive wages. Using data from the German Socio-Economic Panel for 1984-1989 I estimate panel wage regressions for groups of workers separated by skill certification. I find that university graduates' wages increase, and the wages of workers without post-secondary degrees decrease, as the industry share of unskilled workers increases. The effect for apprentices is ambiguous.

JEL Classification: J3

Suggested Citation

Winkelmann, Rainer, Unskilled Labor and Wage Determination: An Empirical Investigation for Germany. JOURNAL OF POPULATION ECONOMICS, Vol. 9, Issue 2, Available at SSRN: https://ssrn.com/abstract=3185

Rainer Winkelmann (Contact Author)

University of Zurich - Statistics and Empirical Economic Research ( email )

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Centre for Economic Policy Research (CEPR)

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