The Returns to International Migration in a Free Mobility Setting: Evidence from Austria and Germany

Andrea Weber, David Card, Wolfgang Dauth, Wolfgang Frimmel, Julia Schmieder and Rudolf Winter-Ebmer

No 26250, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: How big are the gains to international migration, and how do they vary across migrants? We use linked administrative data for Austria and Germany, focusing on migrants who were steadily employed 2-4 years before moving and their former co-workers as a comparison group in a difference-in-differences design. Combining origin- and destination-country data for five years after migration allows us to assess gains for both migrants who remain abroad and those who return. Austrian migrants to Germany experience an immediate and persistent increase of around 13% in daily wages relative to their matched co-workers, while German migrants to Austria gain about 4%. The higher returns for Austrians are mainly driven by higher average wages in Germany rather than differential selection. Consistent with a dynamic learning model, returns are largest for migrants who remain in the destination, smaller for those returning after 1-4 years, and zero for those returning within a year. To interpret these findings, we conduct a parallel analysis of domestic migrants moving to a larger city (Vienna or one of Germany's five largest cities). These "big-city" movers experience wage gains of about 5% in Austria and 10% in Germany.

Keywords: international migration; domestic migration; returns to migration; co-worker design (search for similar items in EconPapers)
JEL-codes: F22 J61 (search for similar items in EconPapers)
Date: 2026-09
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