Immigration and Wage Dynamics in Germany
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
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.
Summary:
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.
Series:
Working Paper No. 2019/301
Subject:
Labor Labor markets Migration Population and demographics Unemployment Unemployment rate Wages
English
Publication Date:
December 27, 2019
ISBN/ISSN:
9781513521145/1018-5941
Stock No:
WPIEA2019301
Pages:
34
Please address any questions about this title to publications@imf.org