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The Labour Market Impact of Immigration: Quasi-Experimental Evidence

Author

Listed:
  • Albrecht Glitz

    (Centre for Research and Analysis of Migration, Department of Economics, University College London)

Abstract
With the fall of the Berlin Wall, ethnic Germans living in the former Soviet Union and the Warsaw Pact countries were given the chance to migrate to Germany. Within 15 years, 2.8 million individuals moved. Upon arrival, these immigrants were exogenously allocated to different regions by the administration in order to ensure an even distribution across the country. Their inflows can therefore be seen as a natural experiment of immigration, avoiding the typical endogeneity problem of immigrant inflows with regard to local labour market conditions. I analyse the effect of these exogenous inflows on relative skill-specific employment and wage rates of the resident population in different geographical areas between 1996 and 2001. The variation I exploit in the empirical estimations arises primarily from differences in the initial skill composition across regions. Skill groups are defined either based on occupations or educational attainment. For both skill definitions, my results indicate a displacement effect of around 4 unemployed resident workers for every 10 immigrants that find a job. I do not find evidence of any detrimental effect on relative wages.

Suggested Citation

  • Albrecht Glitz, 2006. "The Labour Market Impact of Immigration: Quasi-Experimental Evidence," RF Berlin - CReAM Discussion Paper Series 0612, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    • Handle: RePEc:crm:wpaper:0612
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    File URL: https://www.cream-migration.org/publ_uploads/CDP_12_06.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Francesco D’Amuri & Gianmarco I.P. Ottaviano & Giovanni Peri, 2021. "The labor market impact of immigration in Western Germany in the 1990s," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 8, pages 223-243, World Scientific Publishing Co. Pte. Ltd..
    2. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 843-881.
    3. Kondylis, Florence, 2007. "Conflict-induced displacement and labour market outcomes: evidence from post-war Bosnia and Herzegovina," LSE Research Online Documents on Economics 19670, London School of Economics and Political Science, LSE Library.
    4. Kondylis, Florence, 2010. "Conflict displacement and labor market outcomes in post-war Bosnia and Herzegovina," Journal of Development Economics, Elsevier, vol. 93(2), pages 235-248, November.
    5. Gancho Ganchev & Mariya Paskaleva, 2019. "The Relationship between Workforce Migration and the Basic Macroeconomic Variables of the Countries from Central Eastern Europe with a Focus on Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 45-69.
    6. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The labour market impact of immigration," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(3), pages 478-495, Autumn.
    7. Uwe Blien & Linda Borrs & Jens Südekum & Katja Wolf, 2014. "Local Labour Markets and Cultural Diversity," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(2), pages 27-34, 07.
    8. Danzer, Alexander M. & Feuerbaum, Carsten & Gaessler, Fabian, 2024. "Labor supply and automation innovation: Evidence from an allocation policy," Journal of Public Economics, Elsevier, vol. 235(C).
    9. repec:ces:ifodic:v:12:y:2014:i:2:p:19116211 is not listed on IDEAS
    10. Uwe Blien & Linda Borrs & Jens Südekum & Katja Wolf, 2014. "Local Labour Markets and Cultural Diversity," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(02), pages 27-34, July.

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    More about this item

    Keywords

    Immigration; Labour Market Impact; Skill Groups; Germany;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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