TY  - GEN
AB  - In this study we develop and calibrate a search and matching model of the German labour
market and analyze the impact of recent immigration. Our model has two production sectors
(manufacturing and services), two skill groups and two ethnic groups of workers (natives
and immigrants). Moreover, we allow for the possibility of self-employment, endogenous
price and wage setting and fiscal redistribution policy. We find that search frictions are less
important for wages of the low skilled, especially in manufacturing, whereas wages of the high
skilled are more sensitive to their outside opportunities. Furthermore, employment chances
of immigrant workers are up to four times lower than employment chances of native workers,
especially in the high skill segment. Our results show that recent immigration to Germany,
including refugees, has a moderate negative effect on the welfare of low skill workers in
manufacturing (-0.6%), but all other worker groups are gaining from immigration, with high
skill service employees gaining the most (+4.3%). This is because the productivity of high
(low) skill workers is increasing (decreasing) and there is a higher demand for services. The
overall effect of recent immigration is estimated at +1.6%. Finally, we observe that productive
capacities of immigrant workers are underutilized in Germany and a policy implementing
equal employment opportunities can generate a welfare gain equal to +0.9% with all worker
groups (weakly) gaining due to the redistribution.
DA  - 2016
DO  - 10.4119/unibi/2915601
KW  - search frictions
KW  - immigration
KW  - general equilibrium
KW  - redistribution
KW  - welfare
LA  - eng
PY  - 2016
SN  - 2196-2723
SP  - 45-
TI  - General Equilibrium Effects of Immigration in Germany: Search and Matching Approach
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-29156014
Y2  - 2024-11-22T00:53:14
ER  -