DOCSLIB.ORG

Labour Economics 17(5): 835– 47

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Labour Economics 17(5): 835– 47 LLaabboouurr Discussion Paper Series CDP No 06/14 From Sick Man of Europe to Economic Superstar: Germany’s Resurgent Economy Christian Dustmann, Bernd Fitzenberger, Uta Schönberg, Alexandra Spitz-Oener Centre for Research and Analysis of Migration Department of Economics, University College London Drayton House, 30 Gordon Street, London WC1H 0AX Journal of Economic Perspectives—Volume 28, Number 1—Winter 2014—Pages 167–188 From Sick Man of Europe to Economic Superstar: Germany’s Resurgent Economy† Christian Dustmann, Bernd Fitzenberger, Uta Schönberg, and Alexandra Spitz-Oener n the late 1990s and into the early 2000s, Germany was often called “the sick man of Europe” (for example, Economist 2004), a phrase usually attributed I to comments by Czar Nicholas I of Russia about the troubles faced by the Ottoman Empire in the mid-19th century. Indeed, Germany’s economic growth averaged only about 1.2 percent per year from 1998 to 2005, including a recession in 2003, and unemployment rates rose from 9.2 percent in 1998 to 11.1 percent in 2005 (according to World Bank data). Today, after the Great Recession, Germany is described as an “economic superstar” (for example, in the movie “Made in Germany: Europe’s Economic Superstar,” http://fi lms.com/ItemDetails.aspx?TitleId=29218). lms.com/ItemDetails.aspx?TitleId=29218). Germany’s number of total unemployed fell from 5 million in 2005 to about 3 million in 2008, and its unemployment rate had declined to 7.7 percent in 2010 (according to data from Germany’s Federal Employment Agency, the Bundesagentur für Arbeit). In contrast to most of its European neighbors and the United States, Germany experienced almost no increase in unemployment during the Great Recession, despite a sharp decline in GDP in 2008 and 2009 (an episode discussed ■ Christian Dustmann is Professor of Economics, University College London, London, United Kingdom. Bernd Fitzenberger is Professor of Statistics and Econometrics, Univer- sity of Freiburg, Freiburg, Germany. Uta Schönberg is Associate Professor of Economics, University College London, London, United Kingdom. Alexandra Spitz-Oener is Professor of Economics, Humboldt University Berlin, Berlin, Germany. Fitzenberger is also Research Associate at ZEW Mannheim, and Schönberg and Spitz-Oener are also Research Associ- ates at the IAB, Nuremberg, Germany. Their email addresses are [email protected], bernd.fi [email protected],[email protected], [email protected],[email protected], andand alexandra.spitz-oeneralexandra.spitz-oener @wiwi.hu-berlin.de. † To access the Appendix, visit http://dx.doi.org/10.1257/jep.28.1.167 doi=10.1257/jep.28.1.167 168 Journal of Economic Perspectives iinn MMölleröller 22010; 010; B Burdaurda aandnd HHuntunt 22011).011). GGermany’sermany’s eexportsxports rreachedeached aann aall-timell-time rrecordecord ooff $$1.738 trillion1.738 trillion iinn 22011,011, wwhichhich iiss rroughlyoughly eequalqual toto hhalfalf ofof GGermany’sermany’s GDP,GDP, oorr 77.7 percent.7 percent ooff wworldorld eexports.xports. EEvenven tthehe eeurouro ccrisisrisis sseemseems nnotot ttoo hhaveave bbeeneen aableble ttoo sstoptop GGermany’sermany’s sstrengtheningtrengthening eeconomyconomy aandnd eemployment.mployment. HHowow ddidid GGermany,ermany, wwithith tthehe ffourth-largestourth-largest GGDPDP inin thethe worldworld (after(after thethe UnitedUnited SStates,tates, China,China, aandnd JJapan)apan) ttransformransform itselfitself ffromrom ““thethe ssickick manman ooff EEurope”urope” ttoo anan ““economiceconomic ssuperstar”uperstar” iinn llessess tthanhan a ddecade?ecade? OOnene ccommonommon aanswernswer ppointsoints ttoo a sserieseries ooff llegislativeegislative llaborabor mmarketarket rreformseforms tthathat sstartedtarted iinn tthehe mmidid 22000s,000s, tthehe sso-calledo-called ““HartzHartz rreforms.”eforms.” AAnothernother eexplanationxplanation ffocusesocuses oonn tthehe eevolutionvolution ooff GGermany’sermany’s eeconomyconomy aandnd ttraderade balancebalance iinn thethe ccontextontext ofof thethe eurozone.eurozone. However,However, wewe willwill argueargue thatthat thesethese ffactorsactors ddidid nnotot pplaylay a ddecisiveecisive rolerole fforor thethe ttransformationransformation ofof thethe GermanGerman economy,economy, nnamelyamely tthehe rrestructuringestructuring ooff iitsts llaborabor mmarketarket aandnd tthehe iincreasencrease inin competitivenesscompetitiveness tthathat hhasas hhelpedelped GGermanerman eexports.xports. WWee iinsteadnstead ppresentresent evidenceevidence tthathat thethe specifispecifi c ggovernanceovernance sstructuretructure ooff thethe GermanGerman llaborabor mmarketarket iinstitutionsnstitutions aallowedllowed themthem toto rreacteact fl exiblyexibly iinn a ttimeime ofof eextraordinaryxtraordinary economiceconomic circumstances,circumstances, andand thatthat thisthis ddistinctiveistinctive characteristiccharacteristic ooff itsits llaborabor mmarketarket institutionsinstitutions hhasas beenbeen tthehe mmainain reasonreason fforor GGermany’sermany’s eeconomicconomic ssuccessuccess ooverver tthehe llastast ddecade.ecade.1 WWee bbeginegin bbyy aarguingrguing thatthat thethe eevolutionvolution ofof Germany’sGermany’s perper unitunit laborlabor costs—thatcosts—that iis,s, llaborabor ccostsosts rrelativeelative ttoo pproductivity—inroductivity—in bbothoth tthehe mmanufacturinganufacturing ssectorector aandnd tthehe ootherther ssectorsectors iinn tthehe eeconomyconomy hhasas pplayedlayed aann iimportantmportant rroleole iinn tthehe ffavorableavorable eevolutionvolution ooff GGermanerman ttradableradable manufacturingmanufacturing industry.industry. WWee tthenhen iinvestigatenvestigate tthehe mechanismsmechanisms tthathat aallowedllowed fforor wwageage rrestraintsestraints aandnd tthehe ddramaticramatic ddecreaseecrease iinn rrealeal wwagesages aatt tthehe llowerower eendnd ooff tthehe wwageage ddistribution.istribution. TThehe sspecifipecifi c ffeatureeature ooff tthehe GGermanerman ssystemystem ooff iindustrialndustrial rrelationselations tthathat wwee sstresstress iiss tthathat iitt iiss notnot rrootedooted iinn legislation,legislation, bbutut insteadinstead iiss llaidaid outout iinn contractscontracts aandnd mmutualutual aagreementsgreements bbetweenetween tthehe tthree mainhree main aactorsctors iinn GGermany:ermany: eemployermployer aassociations,ssociations, ttraderade uunions,nions, aandnd wworksorks ccouncils.ouncils. TThehe iinstitutionalnstitutional ssetupetup ooff tthishis ssystem,ystem, wwhichhich iiss ddominatedominated bbyy iindustry-widendustry-wide wwageage bbargaining,argaining, rremainedemained bbasicallyasically uunchanged.nchanged. HHowever,owever, mmanyany iindi-ndi- ccatorsators ddemonstrateemonstrate tthathat iitt ddidid cchangehange iinn tthehe wwayay iitt ooperates.perates. FForor eexample,xample, tthehe ssharehare ooff GGermanerman wworkersorkers ccoveredovered bbyy aanyny kkindind ooff uunionnion aagreementgreement hhasas ssharplyharply ddeclined,eclined, aandnd tthehe nnumberumber ooff fi rrm-levelm-level ddeviationseviations ffromrom iindustry-widendustry-wide uunionnion aagreementsgreements hhasas ssharplyharply iincreasedncreased ssinceince tthehe mmidid 11990s.990s. OOverall,verall, tthesehese ggradualradual cchangeshanges wwithinithin tthehe ssystemystem lleded ttoo aann uunprecedentednprecedented ddecentralizationecentralization ooff tthehe wwage-settingage-setting pprocessrocess ffromrom tthehe iindustryndustry llevelevel ttoo tthehe fi rrmm llevel.evel. AAlternatively,lternatively, oonene mmayay rreferefer ttoo tthishis pprocessrocess aass aann iincreasingncreasing llocalizationocalization ooff GGermany’sermany’s iindustrialndustrial rrelations.elations. TThehe ddecentralizationecentralization iinn wwageage settingsetting iinn GGermanyermany isis inin ccontrastontrast toto manymany ooff itsits nneighborseighbors wherewhere tthehe sstatutorytatutory minimumminimum wwageage iiss oftenoften hhighigh (relative(relative toto produc-produc- ttivity),ivity), wwherehere uunionnion wwagesages aandnd wworkork hhourour rregulationsegulations aapplypply ttoo aallll fi rmsrms inin thethe 1 Our argument is similar in spirit to that of Carlin and Soskice (2008, 2009), who argue that it is restruc- turing by Germany’s private sector, using traditional German institutions based on employer-worker cooperation, and not government labor market and welfare state reforms that are to be credited for the German recovery. Christian Dustmann, Bernd Fitzenberger, Uta Schönberg, and Alexandra Spitz-Oener 169 iindustry,ndustry, aandnd wherewhere iinstitutionalnstitutional changechange tthereforeherefore requiresrequires broadbroad consensusconsensus alongalong tthehe ppolitical spectrum.olitical spectrum. WWee tthenhen tturnurn ttoo a ddiscussioniscussion ooff whywhy GGermany’sermany’s laborlabor marketmarket experienceexperience hashas bbeeneen ssoo ddistinctiveistinctive wwithinithin ccontinentalontinental Europe.Europe. OOnn tthehe oneone sside,ide, tthehe ffallall ooff tthehe BBerlinerlin WWallall iinn 11989989 aandnd tthehe dramaticdramatic costcost ooff rreunifieunifi cationcation burdenedburdened thethe GermanGerman economyeconomy iinn aann uunprecedentednprecedented wway,ay, leadingleading ttoo a pprolongedrolonged pperioderiod ooff dismaldismal macroeconomicmacroeconomic pperformance.erformance. OOnn tthehe ootherther sside,ide, iitt ggaveave GGermanerman eemployersmployers aaccessccess ttoo nneighboringeighboring EEastast EEuropeanuropean ccountriesountries tthathat wwereere
Load more

Recommended publications
  • Migration and Labor Market Integration in Europe
    Journal of Economic Perspectives—Volume 35, Number 2—Spring 2021—Pages 49–76 Migration and Labor Market Integration in Europe David Dorn and Josef Zweimüller he Treaty of Rome, signed in 1957 by Belgium, France, Italy, Luxem- bourg, the Netherlands, and West Germany, envisioned the development T of a common market with free movement of goods, capital, services and persons. Today, legal barriers to labor mobility across European countries have been dismantled: more than 460 million citizens of 31 European countries can choose to reside in any other partner country, they can work there without needing a work permit, and they are entitled to equal treatment with nationals in access to employment and public services. However, the European labor market remains considerably less integrated and more heterogeneous than the US labor market, which comprises a popula- tion of 330 million across the 50 states. For example, consider the dispersion of unemployment rates. In 2019, national unemployment rates in European countries were as low as 2.0 percent in Czechia and 3.2 percent in Germany, but as high as 13.7 percent in Spain and 16.6 percent in Greece (Eurostat 2020a). By comparison, state-level unemployment rates within the United States ranged from 2.4 percent to 6.1 percent (Bureau of Labor Statistics 2019). The European labor market also has much lower levels of spatial mobility. The share of European citizens living in a different country than their country of birth was less than 5 percent in 2019 ■ David Dorn is UBS Foundation Professor of Globalization and Labor Markets and Josef Zweimüller is Professor of Macroeconomics and Labor Markets, both at the University of Zurich, Zurich, Switzerland.
    [Show full text]
  • Intra-Country Wage Inequality in the OECD Countries 341 Technological Knowledge (Acemoglu 1998, 2003; Elias Dinopoulos and Paul Seger- Strom 1999; Afonso 2012)
    PANOECONOMICUS, 2018, Vol. 65, Issue 3 (Special Issue), pp. 339-362 UDC 331.215(4):004 Received: 06 October 2017; Accepted: 18 December 2018. DOI: https://doi.org/10.2298/PAN1803339N Original scientific paper Manuel Carlos Intra-Country Wage Inequality Nogueira Corresponding author in the OECD Countries University of Coimbra, Faculty of Economics; Centre for Business and Economic Research (CEBER), Summary: Two reasons are mainly brought to explain the recent increase in Portugal [email protected] intra-country wage inequality in favour of high-skilled labour: Skill-Biased Tech- nological Change (SBTC) and International Trade Liberalisation (IT). Since few Óscar Afonso empirical studies have attempted to assess both interpretations across a com- prehensive sample of countries, we have analysed the impact of both and added University of Porto, Faculty of Economics, some new variables within a unified framework and across 30 OECD countries, Center for Economics and Finance between 2001 and 2015. Using panel data, results show that both explanations (CEFUP); are crucial. However, considering all 30 OECD countries, the IT argument dom- Center for Advanced Studies in Management and Economics inates. Further, we show that seven clusters must be considered in which at least of the University of Beira Interior one theory influence the wage gap. (CEFAGE-UBI), Portugal [email protected] Key words: Skill-biased technological change, International trade, Immigration, Education, Wage inequality, Cluster analysis. JEL: C23, F41, J31, O33, O50. Throughout different countries, the intra-country wage premium on skills has been increasing at least since the early 80s (e.g. Stephen Machin and John van Reenen 1998; David H.
    [Show full text]
  • The Labour Market Effects of Immigration
    CentrePiece Winter 2007/08 What are the effects of increased immigration on the wages and employment of people who are already here, whether they are native- born or earlier immigrants? Research by Marco Manacorda, Alan Manning and Jonathan Wadsworth investigates. The labour market effects of immigration uring the past ten years there Figure 1: has been a significant increase Immigrant shares in male population of working age in the number of individuals coming to live and work in D 25% I Graduates the UK. By 2007, 12.5% of the working I All men age population had been I School leavers born overseas, up from 8.5% at the end of 20% the last recession in 1993 and 7% in the mid-1970s. The addition to the UK labour force 15% over this period caused by the rise in the number of working age immigrants from 10% 2.3 to 4.2 million is about the same as that stemming from the increase in the age population working native-born working age population 5% caused by the baby boom generation of immigrants in the male Percentage reaching adulthood. The relative rise 0% in immigrant numbers in recent years has been greater among those with 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 higher levels of educational attainment Year (See Figure 1). These trends have stimulated a heated debate about the effects of immigration, a United States, where researchers have that found in the United States. The most debate that has taken on renewed vigour reached different conclusions.
    [Show full text]
  • Curriculum Vitae Prof. Dr. Christian Dustmann
    Curriculum Vitae Prof. Dr. Christian Dustmann Name: Christian Dustmann Foto: Privat Forschungsschwerpunkte: Ökonomie der Migration und Integration, Arbeitsökonomik, Familienökonomik, Bildungsökonomik, Lohnstrukturen, Einkommensmobilität Christian Dustmann ist Wirtschaftswissenschaftler und einer der führenden Wissenschaftler auf dem Gebiet der Arbeitsmarktforschung. Er ist Mitglied der Society of Labor Economists, der British Academy sowie der Nationalen Akademie der Wissenschaften Leopoldina. Im Handelsblatt VWL- Ranking 2019 der forschungsstärksten Ökonomen im bzw. aus dem deutschsprachigen Raum wurde Dustmann auf Platz 1 gewählt. Als anerkannter Experte für die Ökonomie der Migration umfasst seine Forschung Bereiche wie die Rolle der Sprache bei der Bestimmung der wirtschaftlichen und sozialen Integration, die Auswirkungen der Einwanderung auf Löhne, Beschäftigung, Technologie und Wahlergebnisse sowie Faktoren, die die Einstellung zur Einwanderung bestimmen, und die Analyse von Segregation und rassistischer Belästigung. Zu seinen weiteren Forschungsgebieten gehören Einkommensmobilität, Lohndynamik und Ungleichheit, die Ökonomie der Kriminalität, die Ökonomie der Bildung, soziale Netzwerke auf dem Arbeitsmarkt und die Ökonomie der Familie. Akademischer und beruflicher Werdegang seit 2018 Forschungsprofessur, Australian National University, Canberra, Australien seit 2017 Forschungsprofessur, The Rockwool Foundation, Kopenhagen, Dänemark 2017 Gastprofessur, Stanford Institute for Economic Policy Research (SIEPR), Stanford University,
    [Show full text]
  • Real Exchange Rates and the Earnings of Immigrants
    Discussion Paper Series CDP 10/21 Real Exchange Rates and the Earnings of Immigrants Christian Dustmann, Hyejin Ku and Tanya Surovtseva Centre for Research and Analysis of Migration Department of Economics, University College London Drayton House, 30 Gordon Street, London WC1H 0AX www.cream-migration.org Real Exchange Rates and the Earnings of Immigrants* Christian Dustmann† Hyejin Ku‡ Tanya Surovtseva§ March 2021 Abstract: Higher price levels in the destination relative to the origin increase the effective real wages of immigrants, thereby affecting immigrants’ reservation and entry wages as well as their subsequent career trajectories. Based on micro-level longitudinal administrative data from Germany and exploiting within-country and across-cohort variations in the real exchange rate (RER) between Germany and countries that newly joined the European Union in the 2000s, we find that immigrants arriving with high RERs initially settle for lower paying jobs than comparable immigrants arriving with low RERs. In subsequent periods, however, wages of high RER arrivals catch up to that of their low RER counterparts, convergence achieved primarily through changes to better paying occupations and firms. Our findings thus point to the persistent regional price differences as one possible reason for immigrants’ downgrading, with implications for immigrants’ career profiles and the assessment of labor market impacts of immigration. JEL codes: J24, J31, J61, O15, O24 Keywords: real exchange rate, reservation wage, immigrant downgrading, earnings assimilation * We thank Jerome Adda, Michael Amior, George Borjas, Kirill Borusyak, Courtney Brell, Bernd Fitzenberger, David Green, Attila Lindner, Kalina Manova, Suphanit Piyapromdee, Uta Schoenberg, Marco Tabellini, Dean Yang, and seminar/conference participants at UCL, IAB, and Barcelona GSE Summer Forum, for helpful discussions and comments.
    [Show full text]
  • Employer-To-Employer Flows in the U.S. Labor Market: the Complete Picture of Gross Worker Flows1
    Employer-to-Employer Flows in the U.S. Labor Market: The Complete Picture of Gross Worker Flows1 by Bruce Fallick* and Charles A. Fleischman** May 2004 JEL code: J63, J64, J21, E24 Keywords: accessions, business cycle, gross flows, job creation, job destruction, job-to-job, on-the-job search, separations, turnover, worker flows The views expressed in this paper are those of the authors and do not necessarily represent the views or policies of the Board of Governors of the Federal Reserve System or its staff. We thank seminar participants at the Board of Governors and the Federal Reserve Bank of Cleveland for helpful comments. We are especially grateful to staff members at the Bureau of Labor Statistics and the Bureau of the Census for their assistance with the data, and to Siddhartha Chowdri, Paul Adler, Maura McCarthy, and Jennifer Gregory for research assistance. * Federal Reserve Board, Washington, DC 20551. (202)452-3722 [email protected] ** Federal Reserve Board, Washington, DC 20551. (202)452-6473 [email protected] 1This paper is an expanded version of an earlier one titled “The Importance of Employer- to-Employer Flows in the U.S. Labor Market”, Finance and Economics Discussion Series #2001-18, Board of Governors of the Federal Reserve System, April 2001. Abstract Despite the importance of employer-to-employer (EE) flows to our understanding of labor market and business cycle dynamics, the literature has lacked a comprehensive and representative measure of the size and character of these flows. To construct the first reliable measures of EE flows for the United States, this paper exploits the “dependent interviewing” techniques introduced in the Current Population Survey in 1994.
    [Show full text]
  • On the Economics and Politics of Refugee Migration
    SUMMARY Refugees This paper provides a comprehensive analysis of refugee migration, with emphasis on the current refugee crisis. After first reviewing the institutional framework laid out by the Geneva Convention for Refugees, we demonstrate that, despite numerous at- tempts at developing a common European asylum policy, EU countries continue to differ widely in interpretation and implementation. We then describe key features of the current refugee crisis and document the overall magnitudes and types of refugee movements, illegal border crossings and asylum applications to EU Member States. We next study the labour market integration of past refugee migrants to EU countries and draw conclusions for the current situation. Finally, we turn to the economics of refugee migrations, contrasting economic and refugee migrants, discussing the trade- offs between long-term asylum and temporary protection and highlighting the benefits of well-coordinated national asylum policies. We conclude with several policy recommendations. JEL codes: F22, J15, J61 —Christian Dustmann, Francesco Fasani, Tommaso Frattini, Luigi Minale and Uta Scho¨nberg Economic Policy July 2017 Printed in Great Britain VC CEPR, CESifo, Sciences Po, 2017. REFUGEES 499 On the economics and politics of refugee migration Christian Dustmann, Francesco Fasani, Tommaso Frattini, Luigi Minale and Uta Scho¨nberg* UCL and CReAM; QMUL, CReAM and CEPR; University of Milan, LdA and CReAM; Universidad Carlos III de Madrid, CReAM and IZA; UCL, CReAM, and IAB 1. INTRODUCTION For the first time since the large refugee movements of the 1990s, which followed the breakup of the bipolar order that had dominated Europe since the 1950s, a refugee cri- sis tops European policy debate.
    [Show full text]
  • Impact of Migration on Income Levels in Advanced Economies Florence
    Impact of Migration on Income Levels in Advanced Economies Florence Jaumotte, Ksenia Koloskova, and Sweta C. Saxena1 Abstract: This paper examines the longer-term impact of migration on the GDP per capita of receiving advanced economies. Addressing carefully the risk of reverse causality, it finds that immigration increases the GDP per capita of host economies, mostly by raising labor productivity. The effect—while smaller than in earlier estimates—tends to be significant: a one percentage point increase in the share of migrants in the adult population can raise GDP per capita by up to 2 percent in the long run. Both high- and low-skilled migrants contribute, in part by complementing the existing skill set of the population. Finally, the gains from immigration appear to be broadly shared. JEL Classification: E24, E25, F22, F62, J15, J24, J61 Keywords: international migration, productivity, inequality, skilled migration 1. Introduction Immigration has taken center stage in the western political dialogue recently, even though labor is the least mobile factor of production. In 2010, migrants constituted only 3 percent of the world population, while trade in goods accounted for about 30 percent of world GDP and capital 15 percent of total world investment. Immigration has also long been a controversial topic among economists (Card, 2009). A long-standing literature analyzes the impact of immigrants on labor market outcomes (i.e. wages and employment) for natives. For instance, Borjas (2003, 2006) and Aydemir and Borjas (2007, 2011) document a negative impact on low-skilled natives’ wages in the U.S. labor market, while Card (1990) finds no impact on wage and employment of native U.S.
    [Show full text]
  • Explaining Germany's Exceptional Recovery
    May 2018 What explains Germany’s exceptional recovery from the ‘sick man of Exceptional Recovery Explaining Germany’s Europe’ in the 1990s to the powerhouse of today? Explaining Germany’s Based on research of leading economists and political scientist in Europe and the US, this eBook explores the conditions leading to Germany’s rise. The book finds that the opening up of Eastern Europe after the Exceptional Recovery fall communism led to profound changes in how firms and workers operated. In particular, the book argues that trade liberalisation with Eastern Europe led to decentralised wage bargaining; to a decentralised, less hierarchical management style in firms; and to the expansion of production networks to Eastern Europe. These changes in the labour Edited by Dalia Marin market institutions and in firms’ business models explain Germany’s exceptional export performance. They also explain why Germany absorbed the China shock more easily than other countries and why globalisation did not contribute to the rise in voting for the far right in Germany. ISBN 978-1-912179-13-8 Centre for Economic Policy Research A VoxEU.org Book 33 Great Sutton Street London EC1V 0DX CEPR Press Tel: +44 (0)20 7183 8801 CEPR Press Email: [email protected] www.cepr.org 9 781912 179138 Explaining Germany’s Exceptional Recovery CEPR Press Centre for Economic Policy Research 33 Great Sutton Street London, EC1V 0DX UK Tel: +44 (0)20 7183 8801 Email: [email protected] Web: www.cepr.org ISBN: 978-1-912179-13-8 Copyright © CEPR Press, 2018. Explaining Germany’s Exceptional Recovery Edited by Dalia Marin A VoxEU.org eBook CEPR Press Centre for Economic Policy Research (CEPR) The Centre for Economic Policy Research (CEPR) is a network of over 1,000 research economists based mostly in European universities.
    [Show full text]
  • Migration and Education
    NORFACE MIGRATION Discussion Paper No. 2011-11 Migration and Education Christian Dustmann and Albrecht Glitz www.norface-migration.org Migration and Education Christian Dustmann and Albrecht Glitz1 Handbook of the Economics of Education, Vol. 4 Edited by E. A. Hanushek, S. Machin and L. Woessmann Abstract: Sjaastad (1962) viewed migration in the same way as education: as an investment in the human agent. Migration and education are decisions that are indeed intertwined in many dimensions. Education and skill acquisition play an important role at many stages of an individual’s migration. Differential returns to skills in origin- and destination country are a main driver of migration. The economic success of the immigrant in the destination country is to a large extent determined by her educational background, how transferable these skills are to the host country labour market, and how much she invests into further skills after arrival. The desire to acquire skills in the host country that have a high return in the country of origin may also be an important reason for a migration. From an intertemporal point of view, the possibility of a later migration may also affect educational decisions in the home country long before a migration is realised. In addition, the decisions of migrants regarding their own educational investment, and their expectations about future migration plans may also affect the educational attainment of their children. But migration and education are not only related for those who migrate or their descendants. Migrations of some individuals may have consequences for educational decisions of those who do not migrate, both in the home- and in the host country.
    [Show full text]
  • Immigration and the Labour Market
    Equality and Human Rights Commission • Immigration and the labour market Immigration and the labour market: Theory, evidence and policy Will Somerville and Madeleine Sumption Migration Policy Institute 55 About this paper The Equality and Human Rights Commission (the Commission) and the Migration Policy Institute (MPI) have a shared interest in immigration and the impacts of immigration on society. This paper was prepared for the Commission but represents the views of the authors and not official Commission policy. 56 Equality and Human Rights Commission • Immigration and the labour market Contents Executive summary 2 1. Introduction 5 2. What do we know about the labour market impact of immigration? 8 3. Why are the estimates of the impact of immigration so small? 21 4. Conclusion: what are the implications for public policy? 33 5. What next? The UK research agenda 38 Executive summary Equality and Human Rights Commission • Immigration and the labour market The current economic downturn has led to questions over the value of economic migration. Public opinion supports the view that immigrants take natives’ jobs and reduce their wages, but most economists disagree. Although basic laws of supply and demand suggest that immigration could reduce wages by increasing the supply of workers, in reality the economy also responds to immigration by increasing demand for labour. This means that the actual impact of immigration is likely to be small, especially in the long run. Insofar as there is a consensus arising from economic research on immigration, it can be summarised as follows: the impact of immigration on the average wages of all workers is small.
    [Show full text]
  • ESS1 Immigration
    European Social Survey Round 1 module proposal. Proposal for a Module on Immigration and Attitudes Principal Applicant – Ian Preston The following proposal is from an international team of economists and sociologists with extensive experience in the analysis and design of survey data, with specialisation in immigration and minority- related issues. The team members are : Thomas Bauer, Institute für die Zukunft der Arbeit, Bonn, Germany David Card, Department of Economics, University of California - Berkeley, USA Christian Dustmann, Department of Economics, University College London, UK James Nazroo, Department of Epidemiology and Public Health, University College London, UK Ian Preston, Department of Economics, University College London, UK Introduction Migration has once again emerged as a key policy issue throughout Europe. The renewed interest in migration issues is driven in part by growing concern over refugee inflows, and the recognition that many of these refugees will settle permanently in their host countries. Related to this is a growing body of evidence that the children of earlier waves of migrants in many European countries lag behind natives in their education, occupational attainment, and incomes. On the other hand, there is pressure to relax the constraints on international flows of highly skilled migrants whose services are needed in certain key sectors, such as financial services and high-tech. Policy makers must strike a fine balance between the needs of refugees, the concerns of the native population, and the demands of employers. Consequently, the attitudes of the majority population towards ethnic minorities and immigrants are carefully monitored by politicians throughout Europe. A full understanding of the way opinions are formed about immigrants and ethnic minorities, and which factors influence these opinions, is clearly desirable.
    [Show full text]