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Restrictive immigration policy in Germany: pains and gains foregone?
[journal article]
Abstract Many European countries restrict immigration from new EU member countries. The rationale is to avoid adverse wage and employment effects. We quantify these effects for Germany. Following Borjas (in Q J Econ CXVIII(4):1335–1374, 2003), we estimate a structural model of labor demand, based on elastici... view more
Many European countries restrict immigration from new EU member countries. The rationale is to avoid adverse wage and employment effects. We quantify these effects for Germany. Following Borjas (in Q J Econ CXVIII(4):1335–1374, 2003), we estimate a structural model of labor demand, based on elasticities of substitution between workers with different experience levels and education. We allow for unemployment which we model in a price-wage-setting framework. Simulating a counterfactual scenario without restrictions for migration from new EU members countries in Germany, we find moderate negative wage and employment effects for incumbent foreigners, but positive effects for natives. Our results indicate that for the native German population as a whole the immigration restrictions are not welfare enhancing.... view less
Keywords
labor migration; wage; EU expansion; Federal Republic of Germany; migration; labor demand; unemployment
Classification
Economics
Labor Market Research
Free Keywords
Labor demand; Wages; Unemployment; EU enlargement; JEL classification: F22; F15; J23
Document language
English
Publication Year
2010
Page/Pages
p. 1-21
Journal
Review of World Economics, 146 (2010) 1
DOI
https://doi.org/10.1007/s10290-009-0044-z
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)