The Annals of Regional Science

, Volume 50, Issue 3, pp 809–840

Foreign labor and regional labor markets: aggregate and disaggregate impact on growth and wages in Danish regions

Authors

    • Department of Border Region StudiesUniversity of Southern Denmark
  • Peter Sandholt Jensen
    • Department of Business and EconomicsUniversity of Southern Denmark
Original Paper

DOI: 10.1007/s00168-012-0517-1

Cite this article as:
Schmidt, T.D. & Jensen, P.S. Ann Reg Sci (2013) 50: 809. doi:10.1007/s00168-012-0517-1

Abstract

Foreign labor has become a central issue in Western Europe. This paper tests whether (1) inflows of foreign labor affect regional growth, and thereby whether employment opportunities for Danish workers are affected; (2) inflows of foreign labor lower real wage growth. We find that foreign labor has non-negative effects on the job opportunities for Danish workers in regional labor markets, whereas the evidence of a regional wage growth effect is mixed. We also present disaggregated results focusing on regional heterogeneity of business structures, skill levels and backgrounds of foreign labor. The results are interpreted within a specific Danish labor market context and the associated regional outcomes. This adds to previous findings and emphasizes the importance of labor market institutions for the effect of foreign labor on regional employment growth.

JEL Classification

F22J21R11R23

Supplementary material

168_2012_517_MOESM1_ESM.pdf (105 kb)
Supplementary material 1 (pdf 104 KB)

Copyright information

© Springer-Verlag 2012