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WORKING PAPER 08-4
Herbert Brücker and Elke J. Jahn
Migration and the Wage-Settings Curve: Reassessing the
Labor Market Effects of Migration
Department of Economics
ISBN 9788778822895 (print)
ISBN 9788778822901 (online)
Migration and the Wage-Setting Curve:
Reassessing the Labor Market E®ects of
代写留学生论文Migration
Herbert BrÄucker¤ and Elke J. Jahnyz
May 2008
Abstract
In this paper we examine the labor market e®ects of migration inGermany on basis of a wage-setting curve. The wage-setting curverelies on the assumption that wages respond to a change in the un-employment rate, albeit imperfectly. This allows one to derive thewage and employment e®ects of migration simultaneously in a gen-eral equilibrium framework. Using administrative micro data we ¯ndthat the elasticity of the wage-setting curve is particularly high foryoung workers and workers with an university degree, while it is lowfor older workers and workers with a vocational degree. The wage andemployment e®ects of migration are moderate: a 1 percent increase inthe German labor force through immigration increases the aggregateunemployment rate by less than 0.1 percentage points and reducesaverage wages by 0.1 percent in the short run. While native workersbene¯t from increased wages and lower unemployment, foreign work-ers are adversely a®ected.

Keywords: Migration, wage-setting curve, labor markets, panel data.
University of Bamberg, IAB NÄurnberg and IZA Bonn, School of Business, IAB NÄurnberg and IZA Bonn, elja@asb.dk.
zThe authors are grateful to Thomas BÄuttner, who imputed the wage data for theempirical part of this paper, and to Andreas Hauptmann, who programmed the codeof the simulation model. Uwe Blien, Gabriel Felbermayr, Wilhelm Kohler, Michael E.Landesmann, Philipp J.H. SchrÄoder, Alessandra Venturini and the participants of the
annual SOLE meeting in New York, May 9-10, 2008, the Thyssen-Workshop on migrationand integration at the University of TÄubingen, December 7-8, 2007, provided valuablecomments. Herbert BrÄucker gratefully acknowledges ¯nancial support from the EuropeanCommission granted to the "Transnationality of Migrants" project. The usual disclaimer
applies.
1
1 Introduction
High and increasing immigration rates in the US and Europe have fanned
fears that migrants reduce wages and limit employment opportunities of thenative labor force. Concerns that immigration increases unemployment areparticularly widespread in the continental European countries, where unem-ployment is persistently high. In this paper we apply a wage-setting curveapproach to analyze the labor market e®ects of immigration. The wage-setting curve relies on the assumption that wages respond to changes inthe unemployment rate, albeit imperfectly. This allows us to consider in-stitutional and other labor market rigidities, which are particularly relevantin the European context. In contrast to the overwhelming majority of theempirical literature, which addresses the impact of migration on wages and(un-)employment separately, we analyze the wage and employment e®ects ofmigration simultaneously in a general equilibrium framework.Following the seminal contributions of Borjas (2003) and Ottaviano andPeri (2006), we employ a nested production function which assumes thatmigrant and native workers within the same experience and education groupare imperfe本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。