Restrictive immigration policy in Germany: pains and gains foregone?

Gabriel J Felbermayr (), Wido Geis and Wilhelm K. Kohler

No 2008,18, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank, Research Centre

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 (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, we find moderate negative wage effects, combined with increased unemployment for some types of workers. Wage-setting mitigates wage cuts. --

Keywords: wages; migration (search for similar items in EconPapers)
JEL-codes: J68 J61 J48 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-lab and nep-mig
Date: 2008
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Working Paper: Restrictive Immigration Policy in Germany: Pains and Gains Foregone? (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:zbw:bubdp1:7443

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