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Immigration and Wage Dynamics in Germany
Author:
Sabine Klinger null

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Anvar Musayev null

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Jean-Marc Natal null

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Enzo Weber null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 301
Language:
English
Publication Date:
27 Dec 2019
DOI:
https://doi.org/10.5089/9781513521145.001
ISBN:
9781513521145
ISSN:
1018-5941
Pages:
34
Keywords:
WP; Phillips curve; labor market; wage growth; immigration; micro-data; panel regression; Germany; wage inflation; wage distribution; effect of immigration; wage Phillips curve; wage difference; WLS panel wage equation; wage development; reservation wage; Wages; Migration; Labor markets; Unemployment; Unemployment rate; Europe; inflation expectation; Labor tightness
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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German wages have not increased very rapidly in the last decade despite strong employment growth and a 5 percentage point decline in the unemployment rate. Our analysis shows that a large part of the decline in unemployment was structural. Micro-founded Phillips curves fit the German data rather well and suggest that relatively low wage growth can be largely attributed to low inflation expectations and low productivity growth. There is no evidence – from either aggregate or micro-level administrative data – that large immigration flows since 2012 have had dampening effects on aggregate wage growth, as complementarity effects offset composition and competition effects.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund