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Immigration and Heterogeneous Labor in Western Germany: A Labor Market Classification Based on Nonparametric Estimation

Patrick Puhani and Markus Frölich ()

No 02-01, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This paper presents a methodology to identify net demand shocks as well as wage rigidities in heterogeneous labor markets on the basis of nonparametric regression. We show how this approach can be used to make suggestions for immigration policy in economies with labor market rigidities. In an application to western Germany it is demonstrated that nonparametric regression is feasible in higher dimensions with only a few thousand observations. In sum, labor markets able to absorb immigrants are characterized by above average age and by professional occupations. On the other hand, labor markets for young workers in service occupations are identified to exhibit rising unemployment due to wage rigidities and are therefore not recommended for immigration.

Keywords: wage; unemployment; migration; rigidity; nonparametric regression (search for similar items in EconPapers)
JEL-codes: J61 J64 J68 C14 J31 (search for similar items in EconPapers)
Date: 2002
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Working Paper: Immigration and Heterogeneous Labour in Western Germany: A Labour Market Classification Based on Nonparametric Estimation (2002) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:896

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