Resource title

The Effect of migration on natives' employment outcomes: evidence from the fall of the Berlin Wall

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I study the impact of East-West internal migration in Germany after the fall of the Berlin Wall on wages and unemployment rates in West German local labor markets. I use a novel strategy to control for the endogeneity of migrants' destination choice: characteristics of the source region are instruments for observed migration flows. Consistent with earlier work, I find no significant effect of migration on West German residents as a whole. However, I do find evidence of important distributional effects. Migration led to relatively worse employment outcomes for the least-educated workers, for blue-collar workers, for men and for foreign nationals. I also find that workers producing "non-traded" goods and services (i.e., output consumed within the local market) benefited from migration. This is consistent with the hypothesis that migrants' own demand offsets the effects of their increase in labor supply.

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en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2007/2007-43.pdf

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