Migration and wage-setting: reassessing the labor market effects of migration

Arbeitspapier

This paper employs a wage-setting approach to analyze the labor market effects of immigration into Germany. The wage-setting framework relies on the assumption that wages tend to decline with the unemployment rate, albeit imperfectly. This enables us to consider labor market rigidities, which are particularly relevant in Europe. We find that the elasticity of the wage-setting curve is particularly high for young and well-educated workers. The labor market effects of immigration are moderate: a 1 percent increase in the German labor force through immigration increases the unemployment rate by less than 0.1 percentage points and reduces wages by 0.1 percent.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Working Paper ; No. 1502

Classification and Topics

• Classification: Wirtschaft ; International Migration ; Wage Level and Structure; Wage Differentials ; Geographic Labor Mobility; Immigrant Workers
• Subject: Migration ; wage-setting ; labor markets ; panel data ; Internationale Arbeitsmobilität ; Einwanderung ; Lohnniveau ; Lohnverhandlungen ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Brücker, Herbert ; Jahn, Elke J.
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/28330
• Last update: 10.03.2025, 11:43 AM CET