Working Paper Series, Department of Economics, Copenhagen Business School
No 07-2008:
Do Immigrants Affect Firm-Specific Wages?
Nikolaj Malchow-Møller, Jakob Roland Munch and Jan Rose Skaksen
Abstract: In this paper, we propose and test a novel effect of
immigration on the wages of native workers. 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, the use of immigrants may also affect wage formation at
the most disaggregate level – the workplace. Using linked employeremployee
data, we find that an increased use of workers from less developed
countries 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 IV. Additional evidence
suggests that this effect works at least partly through a general effect on
the wage norm in the firm of hiring employees with poor outside options
(the immigrants).
Keywords: na; (follow links to similar papers)
JEL-Codes: D21; H32; (follow links to similar papers)
35 pages, January 1, 2009
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