Do Immigrants Affect Firm-Specific Wages?

TY - JOUR

T1 - Do Immigrants Affect Firm-Specific Wages?

AU - Malchow-Møller, Nikolaj

AU - Munch, Jakob R.

AU - Skaksen, Jan Rose

N1 - JEL Classification: F22;J31;J61

PY - 2012/12

Y1 - 2012/12

N2 - We propose and test a novel effect of immigration on wages. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, immigrants might also affect wage formation at the most disaggregate level – the workplace. Using linked employer-employee data, we find that an increased use of low-skilled immigrant workers has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and instrumental variables

AB - We propose and test a novel effect of immigration on wages. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, immigrants might also affect wage formation at the most disaggregate level – the workplace. Using linked employer-employee data, we find that an increased use of low-skilled immigrant workers has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and instrumental variables

KW - Faculty of Social Sciences

KW - Immigration

KW - imperfect labour markets

KW - natives

KW - wage formation

U2 - 10.1111/j.1467-9442.2012.01720.x

DO - 10.1111/j.1467-9442.2012.01720.x

M3 - Journal article

SN - 0347-0520

VL - 114

SP - 1267

EP - 1295

JO - Scandinavian Journal of Economics

JF - Scandinavian Journal of Economics

IS - 4

ER -