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Interacting product and labor market regulation and the impact of immigration on native wages

Author

Listed:
  • Prantl, Susanne

    (University of Cologne)

  • Spitz-Oener, Alexandra

    (Institute for Employment Research (IAB), Nuremberg, Germany ; Humboldt-University Berlin ; IZA)

Abstract
"Does interacting product and labor market regulation alter the impact of immigration on wages of competing native workers? Focusing on the large, sudden and unanticipated wave of migration from East to West Germany after German reunification and allowing for endogenous immigration, we compare native wage reactions across different segments of the West German labor market: one segment without product and labor market regulation, to which standard immigration models best apply, one segment in which product and labor market regulation interact, and one segment covering intermediate groups of workers. We find that the wages of competing native West Germans respond negatively to the large influx of similar East German workers in the segment with almost free firm entry into product markets and weak worker influence on the decision-making of firms. Competing native workers are insulated from such pressure if firm entry regulation interacts with labor market institutions, implying a strong influence of workers on the decision-making of profit-making firms." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Prantl, Susanne & Spitz-Oener, Alexandra, 2014. "Interacting product and labor market regulation and the impact of immigration on native wages," IAB-Discussion Paper 201404, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201404
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    2. Christian Dustmann & Uta Schönberg & Jan Stuhler, 2017. "Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(1), pages 435-483.
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    5. Glitz, Albrecht & Wissmann, Daniel, 2017. "Skill Premiums and the Supply of Young Workers in Germany," IZA Discussion Papers 10901, Institute of Labor Economics (IZA).
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    Keywords

    Ostdeutschland ; Westdeutschland ; Auswirkungen ; Betriebsrat ; Betriebsverfassungsgesetz ; Binnenwanderung ; Einkommenseffekte ; Einwanderung ; Gütermarkt ; Handwerk ; Handwerksordnung ; Inländer ; institutionelle Faktoren ; regionaler Arbeitsmarkt ; Regulierung ; staatlicher Zusammenschluss ; Arbeitsmarkt ; Arbeitsmarktentwicklung ; Arbeitsmigration ; 1986-1999;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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