Work Permit Regulations and Migrants' Labor Market Outcomes

Pamela Qendrai
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Pamela Qendrai: IZA

No 15191, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies how the introduction of a novel residence permit for working purposes – the so-called Blue Card introduced in August 2012 – has affected entry-level wages of non-EU migrants in Germany. The Blue Card was targeted at non-EU university graduates with degrees received or recognized in Germany. It provided immediate residence to students with a working contract that pays above clearly-announced and regularly-updated wage thresholds. We leverage a difference-in-difference approach and unique data on national and international graduates in Germany between 2011-2014. We find that the introduction of the Blue Card increases entry-level wages of non-EU graduates relative to the control group by approximately 2 percent of the pre-treatment entry-level wages. We provide suggestive evidence that these results are not driven by more or better-quality non-EU graduates staying in Germany, but rather because the Blue Card wage threshold acts as a reference point.

Keywords: work permit; foreign students; highly-educated migrants; wages (search for similar items in EconPapers)
JEL-codes: J60 J61 J63 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2022-03
New Economics Papers: this item is included in nep-eur, nep-lab and nep-mig
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