Do immigrants affect firm-specific wages?

Arbeitspapier

In this paper, we propose and test a novel effect of immigration on the wages of native workers. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, the use of immigrants may also affect wage formation at the most disaggregate level - the workplace. Using linked employer-employee data, we find that an increased use of workers from less developed countries has a significantly negative effect on the wages of native workers at the workplace - also when controlling for potential endogeneity of the immigrant share using both fixed effects and IV. Additional evidence suggests that this effect works at least partly through a general effect on the wage norm in the firm of hiring employees with poor outside options (the immigrants).

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 3264

Classification and Topics

• Classification: Wirtschaft ; International Migration
• Subject: Immigration ; firm-specific wages ; outside options ; Migranten ; Ausländische Arbeitskräfte ; Lohnbildung ; Lohn ; Dänemark

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Malchow-Møller, Nikolaj ; Munch, Jakob Roland ; Skaksen, Jan Rose
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/35005