Income inequality is less severe in Germany than in the US. Part of this is due to CEO pay in the US growing faster than in Germany. This column offers some novel explanations for these observations. From the mid-1990s, Germany began offshoring managerial tasks to Eastern Europe, reducing demand for German managers. In addition Germany offshored skill-intensive jobs to Eastern Europe, reducing the skill premium.
Dalia Marin, 23 June 2016
Andreas Beerli, Giovanni Peri, 17 August 2015
The case for immigration restrictions is periodically debated in the political arena. This column shows that fully opening the border to neighbouring countries increased immigrants to Switzerland only by 4% of the labour force over eight years. Such an increased inflow did not have significant aggregate effects. Highly educated workers, however, benefited in terms of higher wages, while middle-educated ones experienced employment losses.
Paola Conconi, Giovanni Facchini, Max Steinhardt, Maurizio Zanardi, 07 January 2013
As populations in rich nations continue to age and skill shortages begin to emerge, concern over getting immigration policy right is set to intensify. This column discusses new research on US policymaking, showing that many of the determinants of policymakers’ attitudes towards trade are also in operation when it comes to migration. Using the Heckscher-Ohlin model, it finds that US House members from districts where skilled labour is abundant are more likely to support both trade liberalisation and a more open policy for unskilled immigration.