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Jan Stuhler (Universidad Carlos III de Madrid) – “Immigration and Monopsony: Evidence Across the Distribution of Firms”

October 10, 2023 @ 12:15 pm - 1:30 pm

Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: 10th of October
Room : 3001


Jan Stuhler (Universidad Carlos III de Madrid) – Immigration and Monopsony: Evidence Across the Distribution of Firms


Abstract :

We argue that the arrival of immigrants with low reservation wages can strengthen the monopsony power of firms. Firms can profit from “cheap” migrant labor by offering lower wages, though at the cost of foregoing potential native hires who demand higher wages. This monopsonistic trade-off can generate large negative effects on native employment which exceed those in competitive models, and which are concentrated among low-paying firms. We validate these predictions using evidence on firm wage premia and employment effects during a large immigration wave in Germany. These adverse effects are not inevitable, and may be ameliorated through policies which constrain monopsony power.




Benoît SCHMUTZ (Pôle d’économie du CREST)
Clément MALGOUYRES (Pôle d’économie du CREST)