Restrictive Immigration Policy in Germany: Pains and Gains Foregone?

Gabriel Felbermayr, Wido Geis-Thöne and Wilhelm Kohler

Chapter 12 in European Economic Integration, WTO Membership, Immigration and Offshoring, 2014, pp 395-419 from World Scientific Publishing Co. Pte. Ltd.

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 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.

Keywords: Economic Integration; WTO Membership; Immigration; Offshoring; European Union; International Trade; Migration; Gravity; Germany; Equilibrium; Tariff Liberalization; Commercial Policy; Eastern Enlargement (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Restrictive immigration policy in Germany: pains and gains foregone? (2010)
Working Paper: Restrictive immigration policy in Germany: Pains and gains foregone? (2010)
Working Paper: Restrictive Immigration Policy in Germany: Pains and Gains Foregone? (2008)
Working Paper: Restrictive immigration policy in Germany: pains and gains foregone? (2008)
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