Muysken, Joan and Vallizadeh, Ehsan and Ziesemer, Thomas (2012): Migration, Unemployment, and Over-qualification: A Specific-Factors Model Approach.
Download (603kB) | Preview
This paper analyses the impact of the skill composition of migration flows on the host country's labour market in a specific-factors-two-sector model with heterogeneous labour (low, medium, and high skill) and price- and wage-setting behaviour. The low- and medium-skilled labour markets are characterized by frictions due to wage bargaining. Moreover, we assume bumping down of unemployed medium-skilled workers into low-skilled labour supply. Endogenous benefits create an interdependency between the two bargaining processes. Particular attention is paid to medium-skilled migration which enables us to augment the literature by replicating important stylized facts regarding medium skills, such as i) the interaction between immigration, low-skilled unemployment and medium-skilled over-qualification, ii) the polarization effect where both low- and high-skilled wages increase relative to the medium-skilled. The model is calibrated using German data. The key findings are: (i) a migration-induced supply shock of medium-skilled workers decreases the low-skilled unemployment rate because of the endogenous benefits; (ii) immigration of medium-skilled labour together with some high-skilled labour has a positive effect on output per capita; (iii) migration of only medium-skilled labour has a neutral impact on GDP per capita.
|Item Type:||MPRA Paper|
|Original Title:||Migration, Unemployment, and Over-qualification: A Specific-Factors Model Approach|
|Keywords:||Medium-Skilled Migration; Wage and Price Setting; Specific Factors Model; Unemployment; Over-qualification; Wage Polarization|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J52 - Dispute Resolution: Strikes, Arbitration, and Mediation ; Collective Bargaining
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J64 - Unemployment: Models, Duration, Incidence, and Job Search
|Depositing User:||Ehsan Vallizadeh|
|Date Deposited:||06. Dec 2012 13:50|
|Last Modified:||01. Nov 2015 20:00|
Abraham, F., Konings, J., Vanromelingen, S., 2009. The Effect of Globalization on Union Bargaining and Price-Cost Margins of firms. Review of World Economic, 145, 13–36.
Autor, D. H., Dorn, D., 2010. Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States. MITWorking Paper.
Beladi, H., 1990. Unemployment, Trickle Down, Effects and Regional Income Disparities. Regional Science and Urban Economics 20, 351–357.
Blanchflower, D. G., Saleheen, J., Shadforth, C., 2007. The Impact of the Recent Migration from Eastern Europe on the UK Economy, IZA, DP No. 2615.
Boeri, T., Br ¨ucker, H., 2005.Migration, Co-Ordination Failures and EU Enlargement. IZA DP No. 1600.
Booth, A. L., 1995. The Economics of the Trade Union. Cambridge University Press.
Borghans, L., de Grip, A. (Eds.), 2000. The Overeducated Worker? The Economics of Skill Utilization. Edward Elgar, Cheltenham, UK.
Borjas, G. J., 1995. The Economic Benefits from Immigration. Journal of Economic Literature 9, 3–22.
Borjas, G. J., 2003. The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market. Quarterly Journal of Economics 118, 1335–1374.
Brücker, H., Jahn, E. J., 2011. Migration and Wage-Setting: Reassessing the Labor Market Effects of Migration. Scandinavian Journal of Economics.
Brynin, M., Longhi, S., 2009. Overqualification: Major or minor mismatch? Economics of Education Review 28, 114–121.
Cahuc, P., Zylberberg, A., 2004. Labor Economics. The MIT Press.
Cortes, P., 2008. The Effect of Low-Skilled Immigration on U.S. Prices: Evidence from CPI Data. Journal of Political Economy 116 (3), 381–422.
Drinkwater, S., Eade, J., Garapich, M., 2009. Poles Apart? EU Enlargement and the LabourMarket Outcomes of Immigrants in the United Kingdom. International Migration 47, 161–190.
D’Amuri, F., Ottaviano, G. I. P., Peri, G., 2010. The Labor Market Impact of Immigration in Western Germany in the 1990s. European Economic Review 54, 550–570.
Dustmann, C., Frattini, T., Preston, I., 2012. The Effect of Immigration along the Distribution of Wages. Review of Economic Studies xxx, 1–29.
Dustmann, C., Glitz, A., Frattini, T., 2008. The Labour Market Impact of Immigration. Oxford Review of Economic Policy 24 (3), 477–494.
Dustmann, C., Ludsteck, J., Schönberg, U., 2009. Revisiting the German Wage Structure. Quarterly Journal of Economics 124 (2), 843–881.
Dustmann, C., Preston, I., 2007. Racial and Economic Factors in Attitudes to Immigration. The B.E. Journal of Economic Analysis & Policy 7, 1–39.
Dustmann, C., Schönberg, U., 2009. Training and Union Wages. Review of Economics and Statistics 91 (2), 363–376.
Facchini, G., Mayda, A., 2008. Attitudes and Migration Policy. Economic Policy 23, 652–713.
Felbermayr, G. J., Geis, W., Kohler, W., 2010. Restrictive Immigration Policy in Germany: Pains and Gains Foregone? Review of World Economics 146, 1–21.
Felbermayr, G. J., Kohler, W., 2006. Immigration and Wages in General Equilibrium: A Theoretical Perspective. In: Foders, F., Langhammer, R. (Eds.), Labor Mobility and the World Economy. Springer, pp. 51–80.
Felbermayr, G. J., Kohler, W., 2007. Immigration and Native Welfare. International Economic Review 48, 731–760.
Goos, M., Manning, A., Salomons, A., 2009. Job polarization in Europe. American Economic Review: Papers & Proceedings 99, 58–63.
Hamermesh, D. S., 1993. Labor Demand. Princeton University Press.
Hartog, J., 2000. Over-education and earnings: where are we, where should we go? Economics of Education Review 19, 131–147.
Hartwig, J., 2011. Testing the Baumol–Nordhaus Model with EU KLEMS Data. Review of Income and Wealth 57, 471–489.
Jones, R. W., 1965. The Structure of Simple General Equilibrium Models. The Journal of Political Economy 73, 557–572.
Kahanec, M., Zimmermann, K. F., 2010. Migration in an Enlarged EU: A Challenging Solution? In: Keereman, F., Szekely, I. (Eds.), Five Years of an Enlarged EU: A Positive Sum Game. Springer, pp. 63–94.
Koskela, E., Stenbacka, R., 2009. Equilibrium unemployment with outsourcing under labour market imperfection. Labour Economics 16, 284–290.
Koskela, E., Stenbacka, R., 2010. Equilibrium unemployment with outsourcing and wage solidarity under labour market imperfection. European Economic Review 54, 376–392.
Layard, R., Nickell, S., Jackman, R., 2005. Unemployment: Macroeconomic Performance and the LabourMarket. Oxford University Press.
Mayda, A., 2006. Who is against Immgration? a Cross-Country investigation of Individual Attitudes toward Immigration. The Review of Economics and Statistics 88 (3), 510–530.
Muysken, J., Ziesemer, T., 2011. The Effect of Net Immigration on Economic Growth in an Ageing Economy: Transitory and Permanent Shocks. UNU-MERIT Working Papers, 2011-055Maastricht University.
OECD, 2007. International Migration Outlook. SOPEMI-Report.
Ottaviano, G. I., Peri, G., 2008. Immigration and National Wages: Clarifying the Theory and the Empirics, NBERWorking Paper No. 14188.
Ottaviano, G. I., Peri, G., 2011. Rethinking the Effects of Immigration on Wages. Journal of the European Economic Association, 1–46.
Pierrard, O., Snessens, H. R., May 2003. Low-Skilled Unemployment, Biased Technological Shocks and Job Competition, IZA DP No. 784.
Siebert, H., 1997. LaborMarket Rigidities: At the Root of Unemployment in Europe. Journal of Economic Perspectives 11, 37–54.
Spitz-Oener, A., 2006. Technical change, job tasks, and rising educational demands: Looking outside the wage structure. Journal of Labour Economics 24, 235–270.
Storesletten, K., 2000. Sustaining fiscal policy through immigration. Journal of Political Economy 80, 300–322.
Van Reenen, J., Michaels, G., Natraj, A., 2010. Has ICT Polarized Skill Demand? Evidence from eleven Countries over 25 Years, NBER working paper 16138.
Weiss, M., Garloff, A., 2009. Skill-Biased Technological Change and Endogenous Benefits: The Dynamics of Unemployment and Wage Inequality. Applied Economics 43, 811–821.
Ziesemer, T., 2011. Developing Countries’ Net-migration: The Impact of Economic Opportunities, Disasters, Conflicts, and Political Instability. International Economic Journal 25, 373–386.