Migration, unemployment, and skill downgrading: a specific-factors approach

Ehsan Vallizadeh, Joan Muysken () and Thomas Ziesemer ()

No 201313, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "This paper analyzes the impact of the skill composition of migration flows on the host country's labor market in a specific factors two-sector model with heterogeneous labor (low-, medium-, and highly-skilled) and price- and wage-setting behavior. The low- and medium-skilled labor markets are characterized by frictions due to wage bargaining. Moreover, we assume skill downgrading of unemployed medium-skilled workers into low-skilled labor supply. Endogenous benefits create an interdependency between the two bargaining processes. Particular attention is paid to medium-skilled migration, which enables us to contribute to the literature by replicating important stylized facts regarding medium skills, such as i) the interaction between immigration, low-skilled unemployment, and mediumskill downgrading, ii) the increase in low skill intensive service jobs. The model is calibrated using data for Germany. The key findings are: (i) a migration-induced supply shock of medium skilled workers decreases the low-skilled unemployment rate under endogenous benefits; (ii) migration of only medium skilled labor has a neutral impact on GDP per capita; (iii) immigration of medium skilled labor together with some high skilled labor has a positive effect on output per capita." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Auswirkungen; Beschäftigungseffekte; Dequalifizierung; Einkommenseffekte; Einwanderer; Einwanderung; Inländer; institutionelle Faktoren; mittlere Qualifikation; Niedrigqualifizierte; Qualifikationsstruktur; Arbeitskräfteangebot; Arbeitslosenquote; Arbeitslosenunterstützung; unterwertige Beschäftigung; 2005-2005 (search for similar items in EconPapers)
JEL-codes: F22 J51 J52 J61 J64 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013
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Published in/as: The Scandinavian Journal of Economics, (2015), 41 S., doi:10.1111/sjoe.12104

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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:201313

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