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THE IMPACT OF IMMIGRATION ON THE EMPLOYMENT AND WAGES OF NATIVE WORKERS

 

Andri Chassamboulli

University of Cyprus

 

Theodore Palivos

Athens University of Economics and Business

 

ABSTRACT

We analyze the impact of the immigration influx that took place during the years 2000-2007 in Greece on labor market outcomes. We employ a search and matching framework that allows for skill heterogeneity and differential unemployment income (search cost) between immigrants and natives. Within such a framework, we .find that skilled native workers, who complement immigrants in production, gain in terms of both wages and employment. The effects on unskilled native workers, who compete with immigrants, on the other hand, are ambiguous and depend first on the presence of a statutory minimum wage and second on the way that this minimum wage is determined.

 

Keywords: Immigration; Search and Matching; Unemployment; Skill-heterogeneity; Minimum Wage; Greek Economy.

 

JEL Classification: F22; J61; J64

 

Acknowledgements: The views expressed do not necessarily reflect those of the Bank of Greece.

 

Correspondence:

Theodore Palivos

Athens University of Economics and Business

76, Patission St.,

Greece, 10434,

Tel: +30 210 8203 741

e-mail: tpalivos@aueb.gr


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