Research Seminar

What is the impact of EU enlargement?: Estimating the wage effect of labor supply shocks with a discrete choice model — Mina Taniguchi

15 Feb 2023


Mina Taniguchi (LMU)


What are the effects of the EU enlargement on different types of workers? Does firm heterogeneity matter when estimating the wage effect of labor supply shocks? To address these questions, this paper estimates the wage effects of immigration due to the EU enlargement with a multiple discrete choice model. Estimating model parameters shows that observable and unobservable firm-level characteristics are significantly associated with a firm’s labor demand. The calculation of wage effects reveals that the EU enlargement had a sizable negative impact on the wages of low-skilled foreign workers while very small effects on the other types of workers, including low-skilled native workers.


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