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Why to employ both migrants and natives? A study on task-specific substitutability

Anette Haas (), Michael Lucht () and Norbert Schanne ()
Additional contact information
Michael Lucht: Institut für Arbeitsmarkt- und Berufsforschung (IAB)

No 2012026, Norface Discussion Paper Series from Norface Research Programme on Migration, Department of Economics, University College London

Abstract: This paper analyzes the performance of migrants on the German labor market and its dependence on the tasks performed on their jobs. Recent work suggests quantifying the imperfect substitutability relationship between migrants and natives as a measure for the hurdles migrants have to face. Our theoretical work adopts that migrant shares are very heterogeneous across firms which is hard to reconcile with an aggregate production function. We argue that the ability to integrate migrants may form a competitive advantage for firms. We show in a Melitz-type framework that the output reaction to wage changes varies across firms. Hence, substitution elasticities of an aggregate production function can be quite different from those individual firms are faced with. Finally we estimate elasticities of substitution for different aggregate CES-nested production functions for Germany between 1993 and 2008 using administrative data and taking into account the task approach. We find significant variation in the substitutability between migrants and natives across qualification levels and tasks. We show that especially interactive tasks seem to impose hurdles for migrants on the German labor market.

Keywords: Heterogeneity; Migrants; Substitution Elasticity; Tasks (search for similar items in EconPapers)
JEL-codes: J15 J24 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dem, nep-eur, nep-lab, nep-lma and nep-mig
Date: 2012-08
References: View references in EconPapers View complete reference list from CitEc
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