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Do Immigrants Affect Firm‐Specific Wages? *
Author(s) -
MalchowMøller Nikolaj,
Munch Jakob R.,
Skaksen Jan Rose
Publication year - 2012
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/j.1467-9442.2012.01720.x
Subject(s) - endogeneity , immigration , affect (linguistics) , economics , instrumental variable , labour economics , wage , demographic economics , econometrics , linguistics , philosophy , archaeology , history
We propose and test a novel effect of immigration on wages. 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, immigrants might also affect wage formation at the most disaggregate level – the workplace. Using linked employer−employee data, we find that an increased use of low‐skilled immigrant workers 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 instrumental variables.