RT Journal Article
T1 Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment
A1 Dustmann, Christian
A1 Schönberg, Uta
A1 Stuhler, Jan
AB By exploiting a commuting policy that led to a sharp and unexpected inflow of Czech workers to areas along the German-Czech border, we examine the impact of an exogenous immigration-induced labor supply shock on local wages and employment of natives. On average, the supply shock leads to a moderate decline in local native wages and a sharp decline in local native employment. These average effects mask considerable heterogeneity across groups: while younger natives experience larger wage effects, employment responses are particularly pronounced for older natives. This pattern is inconsistent with standard models of immigration but can be accounted for by a model that allows for a larger labor supply elasticity or a higher degree of wage rigidity for older than for young workers. We further show that the employment response is almost entirely driven by diminished inflows of natives into work rather than outflows into other areas or nonemployment, suggesting that "outsiders" shield "insiders" from the increased competition.
PB Oxford University Press
SN 0033-5533
YR 2017
FD 2017-02-01
LK https://hdl.handle.net/10016/25228
UL https://hdl.handle.net/10016/25228
LA eng
NO Christian Dustmann acknowledges funding through the ERC AdvancedGrant 323992-DMEA and by the DFG (DU1024/1-1). Jan Stuhler acknowledgesfunding from the German National Academic Foundation, the Spanish Ministry ofEconomy and Competitiveness (MDM2014-0431 and ECO2014-55858-P), and theComunidad de Madrid (MadEco-CM S2015/HUM-3444).
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