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Our empirical analysis is based on a 2 percent random sample drawn
from the German social security records (IABS) for the period from 1980 to
2004. This data set allows us to identify the elasticities of the wage-setting
curve for education and experience groups and to estimate the elasticities of
substitution between di®erent types of labor in Western Germany.
We ¯nd an average elasticity of the wage-setting curve of -0.15 at the
national level, which is somewhat higher than the elasticities found in theregional wage curve literature in other OECD countries (see Blanch°owerand Oswald, 1994a; Card, 1995; Nijkamp and Poot, 2005), but substantiallyhigher than that found at the regional level in Germany (Baltagi, Blien,and Wolf, 2007). However, the elasticities of the wage-setting curves °uc-tuate considerably across skill groups and experience groups. The elasticitybetween wages and unemployment is particularly large for highly educatedworkers and workers with little work experience.
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We simulate the immigration impact on the German labor market in three
scenarios: The ¯rst scenario analyzes the e®ects of a 1 percent immigrationat the given skill and age structure of the foreign and native labor force.The second scenario examines the impact of the actual labor immigration
during the total 1980-2004 period and the ¯nal scenario assesses the e®ectsof the main immigration shock on the German economy during the 1984-1993subperiod.
At the given skill structure of the foreign workforce, a 1 percent increasein labor supply through the immigration of foreigners increases the unem-ployment rate by less than 0.1 percentage points in the short run, while itremains almost stable in the long run. Average wages decline by 0.1 per-cent in the short run, but remainassignments代
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