Journal of Population Economics

, Volume 7, Issue 2, pp 177–192 | Cite as

Native wage impacts of foreign labor: a random effects panel analysis

  • John P. De New
  • Klaus F. Zimmermann


Natives often fear labor market competition of foreigners, as they may induce declining wages and rising unemployment as in the case of natives and immigrants being substitutes. However, there is also the potential that they are complements, producing positive wage and employment effects. This issue is examined in a framework with two types of labor, such that low qualified native and immigrant workers (blue collar), although substitutes for one another, are potentially complements to high qualified native workers (white collar). This is thought to accurately reflect the past West German immigration experience. Examining the wage functions of white and blue collar natives in a random effects panel model using a vast sample of micro data, we actually find that foreigners negatively affect the wages of Germans on the whole. Relatively small gains are made by white collar employees with less than 20 years experience, but these are outweighed by the larger negative effects experienced by blue collar employees.


White Collar Employment Effect Blue Collar Immigrant Worker Native Worker 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag 1994

Authors and Affiliations

  • John P. De New
    • 1
  • Klaus F. Zimmermann
    • 2
    • 3
  1. 1.SELAPOUniversität MünchenMünchenGermany
  2. 2.SELAPOUniversität MünchenMünchenGermany
  3. 3.CEPRLondon

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