You are on page 1of 21


Gabriel J. Felbermayr, Sanne Hiller and Davide Sala

Does Immigration Boost Per Capita Income?

Department of Economics

ISBN 9788778823878 (print)

ISBN 9788778823885 (online)
Does Immigration Boost Per Capita Income?∗

Gabriel J. Felbermayr†, Sanne Hiller‡, and Davide Sala§

October, 2008


Using a cross-section of countries, we adapt Frankel and Romer’s (1999) IV strategy

to international labor mobility. Controlling for institutional quality, trade, and financial
openness, we establish a robust and non-negative causal effect of immigration on real per-
capita income.

Keywords: Gravity model, international trade, international migration, cross-country in-

come regression.

JEL-Codes: F22, F12

We thank Wilhelm Kohler and the participants at the Workshop “Migration and Labor Market Integration”
at Tübingen University for comments. The project was supported by grant no. of the Thyssen
Foundation. The Development Research Centre on Migration, Globalization and Poverty, at University of Sussex
has kindly provided us with the data. All remaining errors are ours. A replication archive is available on; Department of Economics, University of Stuttgart-Hohenheim, 70593
Stuttgart, Germany.; Department of Economics, Aarhus School of Business, University of Aarhus, Hermodsvej 22,
8230 Aabyhøj, Denmark
Corresponding author:; Department of Economics, Aarhus School of Business, University of
Aarhus, Hermodsvej 22, 8230 Aabyhøj, Denmark.
1 Motivation

Advocates of liberal policies argue that immigration raises the income of native factor owners

(Borjas, 1994). For this immigration surplus to materialize, the aggregate production function

must display complementarity between inputs and the factor-content of the immigrant inflow

must have a different composition than the pre-existing stock of natives.1 In contrast, per capita

income- including immigrants- does not necessarily go up. If immigrants are on average poorer

than natives, it trivially falls.2 Besides being of intrinsic interest, the per capita income effect

determines whether the winners of immigration can potentially compensate the losers without

excluding the immigrants from the redistribution scheme.

In the long-run, if immigrants assimilate perfectly (i.e. become indistinguishable from na-

tives) and the capital stock adjusts, per capita income reverts to the initial level. However, even

in the long-run, migrants may have different propensities to accumulate financial and human

capital than natives, which affects per capita income. Moreover, Ottaviano and Peri (2006)

argue that the diversity-enhancing effect of immigration increases the value of aggregate out-

put. Still, there may be an opposite effect, if immigration exacerbates ethnic tensions. These

ambiguities call for an empirical assessment, the first one - to our best knowledge - on a broad

number of countries.3

We deal with the endogeneity of immigration to per capita income constructing the geograph-

ical component of migration from cross-country data on bilateral migrant stocks and using it as

an instrument - akin to Frankel and Romer’s (1999, henceforth F&R) for trade openness. Based

on non-weak instruments, our analysis establishes a robust, non-negative effect of immigration

on per capita income.

Other conditions, such as the absence of distortions must hold too.
Total GDP always increases if immigrants find productive employment.
Buch and Toubal (2008) account for labor market openness in their study of German states.

2 Empirical strategy

Income regression. Following a well established literature, we estimate the following cross-

country income regression:

ln yi = α + β M ln Mi + β T Ti + β F Fi + γ 0 Γi + ιIi + ui , (1)

where i is the country index, yi is per capita GDP (constant dollar PPP, in 2000) and Mi the

stock of immigrants. The vector Γi contains population, land surface, a continuous measure

of landlockedness - to capture domestic market size - and the malaria index - to control for

geography (Rodrik et al., 2004).4 Ii proxies institutional quality (Glaeser et. al., 2004).

Our focus is on β M . Since we include population (native and foreign-born), β M does not

measure the pure size effect of immigration but rather its compositional effect, namely the one

of an increase in the immigrant share.

A country’s attitude towards migration is likely shaped by its history and culture. Unable to use

fixed effects in a cross-section, we account for unobserved heterogeneity by inclusion of Ti - the

ratio of exports and imports over GDP - and Fi - an indicator of financial market integration.

We presume that a liberal attitude towards labour flows comes along with a high degree of

integration on goods and financial markets.

Instrumental Variables. Mi , Ti , are potentially endogenous. Following F&R, we exploit ge-

ographical variation to instrument Ti . We extend this strategy to Mi , using a 226x226 matrix of

international bilateral migrant stocks for the year 2000. Migrants are defined as “foreign-born”,

so that our measure is unaffected by national naturalization policies. Let Mij denote the number
of individuals born in country j and residing in i. Then, Mi = j∈J Mij is the total immigrant



E(Xij |Gij , ADJij ) = exp[Gij γ X + ADJij λX + (Gij ADJij )δ X ] (2)

The index of landlockedness is the share of land borders in total border length. Compare Sachs (2003).

with X ∈ {M, T } . Gij is a vector containing geographical variables (landlockedness, ln pop-

ulation in 1960, ln area for each i and j and ln bilateral distance) and ADJij an adjacency

dummy.5 We use Poisson Pseudo Maximum Likelihood (PPML) to estimate (2) for the year
2000 (see Santos and Tenyreyro (2006)). Our instruments are computed as X̂i = j X̂ij ,

X̂ij = Gij γ̂ X + ADJij λ̂X + (Gij ADJij )δ̂ X is the in-sample linear prediction.6

Three remarks are in order. First, PPML estimation yields stronger instruments compared

to OLS, since it accounts for cases with Xij = 0, representing a non-negligable share of country-

pairs (6(3)% of Mij (Tij ) in the respective sample).

Second, X̂i is a generated measure of multilateral remoteness determined exclusively by geogra-

phy. Hence, no concerns about consistency of (2) as a gravity equation arise.

Third, M̂i and T̂i prove to be collinear in our regression analysis, leading to weak-instruments

when used simultaneously. On the presumption a country’s remoteness affects economic and

psychological cost of migration, we shall use M̃i = N 1−1 w Dwi as an alternative instrument for

Mi (N is the number of countries and Dwi is bilateral distance).

Fi and Ii may well be endogenous, but simultaneous instrumentation of many endogenous

regressors exacerbates the concern for weak instruments. Since good bilateral data for financial

flows are rare, we abstain from instrumenting Fi like Xi , but rather proxy Fi by the (ln) distance

to the closest major financial center (Rose and Spiegel, 2008). Ii is constitutional review (La

Porta et. al., 2004). Compared to alternative common measures (e.g. expropriation risk or

government effectiveness), it reflects permanent constraints on the executive authority, rather

than election outcomes or temporary policies (Glaeser et al., 2004). By definition, endogeneity

concerns are attenuated.

The specification is borrowed from F&R. Lewer and van den Berg (2008) show that bilateral migration flows
are accurately predicted by geographical variables (along with income and population).
Using only in-sample predictions increases precision, compare Noguer (2005).

3 Results

The elasticity of y with respect to the migrant stock is (significantly) positive throughout all

specification in Table 1. Most importantly, weakness of instruments is of no concern (see the

minimum eigenvalue statistics - Stock and Motohiro (2002)).

Effect of Immigration. (2) and (3) provide IV estimates based on M̂ and M̃ , respectively.

The different performance in (2) relative to (3) is ascribed to the correlation of 0.52 between M̂

and T (and, therefore with the residual), whereas M̃ is free of this problem. Overall, OLS un-

derestimates β M . Several factors weigh upon this discrepancy. On the one hand, measurement

error in the migrant stock causes attenuation bias in OLS. On the other hand, unobserved het-

erogeneity (T, F ), would cause overestimation of OLS. Finally, the direction of the simultaneity

bias(reverse causality of M and y) is ambiguous.

Interestingly, throughout first stage regressions, M̃ is negatively correlated with immigration,

but positively associated with trade openness.

Trade Openness. In (5), we add trade openess. To avoid the multicollinearity between T̂

and M̂ when jointly used, we instrument M with M̃ and T with T̂ .7 The absence of such

multicollinearity is essential to disentangle the effect of labour from goods market integration.

Financial Openness. (6) and (7) additionally control for financial openness. This undoes the

statistical significance of the immigration effect, but preserves its positive sign. A similar effect

is produced by the direct inclusion among the regressors of the great circle distance, strongly

correlated with Rose and Spiegel’s indicator (ρ = 0.6059). Interestingly, the positive effect of

trade openness remains.

Geography and Institutions. (1) to (7) draw on the largest possible sample, while (8) to

(11) use a smaller sample for which institutional quality data is available. These 63 countries

An F-test on the first stage (regressing T on T̂ and M̂ ), reveals both instruments are jointly but not individ-
ually significant. In this case, weakness of instruments cannot be rejected. Multicollinearity persists even if (2) is
not identically specified for Mij and Tij .

tend to be richer, and presumably, have better data quality. Specifications (8) and (9) control

for a direct effect of geography - see Sachs (2003) - extending (6) and (7) with the inclusion of a

malaria index. Adding institutional controls (coefficients not displayed) in (10) and (11) leaves

the coefficients on immigration, trade and financial integration fairly unchanged. The IV and

OLS estimates are considerably close. Finally, the inclusion of ethnic fragmentation (Alesina et

al., 2003) leaves estimates qualitatively unchanged (not reported).

4 Summary

Using geography-based instruments and controlling for the sheer population size effect, we find

robust evidence for immigration to be non-negatively causally related to per capita income.

Hence, immigration gives rise to a gain that can – in principle – be used to make the native

population better off without excluding the immigrants from the redistribution scheme.

Our preferred specification – columns (10) and (11) in Table 1 – imply that a 10% increase

in the migrant stock leads to a per capita income gain of 2.2%. We also find that trade and

financial integration positively affect per capita income.

A Data Sources
- Population, GDP per capita (2000 PPP USD)(yi ): World Development Indicators 2007.

- Bilateral migration stocks (Mij ): World Bank, Development Research Centre on Migra-
tion, Globalisation and Poverty. 8

- Bilateral trade data (Tij = (Xij + Xji ) /Yi ): Direction of Trade Statistics, IMF, Sept. 2006

- Trade openness (Ti ): Penn World Tables 6.2.

- Adjacency (ADJij ), Area, bilateral distance: CEPII, Paris.9

- Financial Openness (Fi ) proxy: negative of Rose (2008).

- Constitutional Review (Ii ) : La Porta et al. (2004).

- Landlockedness: CIA World Factbook 2008.

- Malaria Index: Rodrick et al. (2004).

[1] Alesina, A., Devleeschauwer, A., Easterly, W., Kurlat, S. and Wacziarg, R. (2003). Frac-
tionalization. Journal of Economic Growth 8(2): 155-194.

[2] Borjas, G.J. (1994). The Economics of Immigration. Journal of Economic Literature 32(4):

[3] Buch, C.M., Toubal, F. (2008). Openness and Growth: The Long Shadow of the Berlin
Wall. Journal of Macroeconomics, doi: 10.1016/j.jmacro.2008.07.004.

[4] Frankel, J.A., and Romer, D. (1999). Does Trade Cause Growth? American Economic
Review 89(3): 379-399.

[5] Glaeser, E. L., La Porta, R. F. L., and Shleifer, A. (2004). Do Institutions Cause Growth?.
Journal of Economic Growth 9(4): 271-303.

[6] La Porta , Rafael F. L., Lopez-de-Silanes, F., Pop-Eleches, C., Shleifer, A. (2004). Judicial
Checks and Balances. Journal of Political Economy, 112(2): 445 - 470.

[7] Lewer, J.J., and Van den Berg, H. (2008). A gravity model of immigration. Economics
Letters 99(1): 164-167.

[8] Noguer, M.,Siscart, M. (2005). Trade raises income: a precise and robust result. Journal of
International Economics vol. 65(2): 447-460.

[9] Ottaviano, G. and G. Peri (2006). Rethinking the Effects of Immigration on Wages. NBER
Working Paper (12496).

http : // migration/global migrant origin database.html

[10] Rodrik, D., Subramanian A., and Trebbi F. (2004). Institutions rule: the primacy of in-
stitutions over geography and integration in economic development. Journal of Economic
Growth 9(2): 271-293.

[11] Rose, A. K., and Spiegel, M. M. (2008). International Financial Remotness and Macroeco-
nomic Volatility. Mimeo, University of California Berkeley.

[12] Sachs, J. D. (2003) Institutions don’t Rule: Direct Effects of Geography on per capita
Income, NBER WP 9490.

[13] Santos Silva, J.M.C. and Tenreyro, S. (2006). The log of gravity. Review of Economics and
Statistics 88 (4): 641-658.

[14] Stock, J., Motohiro, Y. (2002). Testing for Weak Instruments in Linear IV Regression.
NBER Technical WP 0284.

Table 1. Per capita income and immigration
(A) Second-stage regressions

Large sample (N=162) Small sample (N=63)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)


Migration (M) 0.261*** 0.810*** 0.535*** 0.240*** 0.484** 0.210*** 0.0998 0.231*** 0.226** 0.232*** 0.221**
(0.0462) (0.153) (0.138) (0.0434) (0.228) (0.0426) (0.133) (0.0539) (0.0897) (0.0531) (0.0875)
Trade (T) 0.00565*** 0.0191*** 0.00358*** 0.0151** 0.00109 0.00457 0.00104 0.00456
(0.00191) (0.00724) (0.00125) (0.00656) (0.00125) (0.00301) (0.00126) (0.00295)
Finance (F) 0.723*** 0.582*** 0.426*** 0.415*** 0.431*** 0.420***
(0.0965) (0.159) (0.0948) (0.0981) (0.1000) (0.101)
Market Size yes yes yes yes yes yes yes yes yes yes yes
Geography yes yes yes yes
Institution yes yes
Adj R2 / Wald Chi 0.343 66.20 79.10 0.387 68.09 0.542 161.7 0.774 475.7 0.773 488.2
MES 27.86 18.03 5,506 6,351 7,066 6,921
(B) First-stage regressions
Variable instrumented: M for (2) M for (3) M for (5) T for (5) M for (7) T for (7) M (for 9) T for (9) M for (11) T for (11)

M̂ 1.500*** -2.881*** -1.763** 55.62 -2.242** 57.75* -2.923** 131.6*** -2.937** 132.0***
(0.279) (0.710) (0.861) (39.61) (0.921) (32.90) (1.302) (48.61) (1.334) (49.43)
Tˆ 0.0254*** 1.441** 0.0416*** 1.369* 0.0429** 2.559** 0.0431** 2.553**
(0.00855) (0.584) (0.0145) (0.811) (0.0200) (1.136) (0.0205) (1.147)
Finance (F) -0.609** 2,708 -0.947*** -13.39 -0.957*** -13.11
(0.243) (11.83) (0.287) (16.73) (0.291) (17.17)

Adj R2 0.556 0.531 0.549 0.375 0.565 0.372 0.311 0.521 0.300 0.512
F-stat. on Excl. Instruments 28.82 16.49 15.94 3,996 12.73 1,658 8,882 3,687 8,345 3,596
Robust standard errors in brackets. ***, **, * denote significance at the 1,5,10% levels, respectively. All regressions include a constant (not shown). Critical values for Minimum Eigenvalue Statistic (MES) are 7.03 (5), 4.58 (10), 3.95 (20), 3.63 (30).
Market Size Controls: ln Area, ln Population 1960, Landlockedness. Geography Controls: Malaria Index. Institutional Controls: Constitutional Review. All first stage regressions include all exogeneous regressors (not shown).
Department of Economics:

Skriftserie/Working Paper:


WP 03-1 Søren Harck: Er der nu en strukturelt bestemt langsigts-ledighed

i SMEC?: Phillipskurven i SMEC 99 vis-à-vis SMEC 94. ISSN

WP 03-2 Beatrice Schindler Rangvid: Evaluating Private School Quality

in Denmark. ISSN 1397-4831.

WP 03-3 Tor Eriksson: Managerial Pay and Executive Turnover in the

Czech and Slovak Republics. ISSN 1397-4831.

WP 03-4 Michael Svarer and Mette Verner: Do Children Stabilize

Marriages? ISSN 1397-4831.

WP 03-5 Christian Bjørnskov and Gert Tinggaard Svendsen: Measuring

social capital – Is there a single underlying explanation? ISSN

WP 03-6 Vibeke Jakobsen and Nina Smith: The educational attainment of

the children of the Danish ‘guest worker’ immigrants. ISSN

WP 03-7 Anders Poulsen: The Survival and Welfare Implications of

Altruism When Preferences are Endogenous. ISSN 1397-4831.

WP 03-8 Helena Skyt Nielsen and Mette Verner: Why are Well-educated
Women not Full-timers? ISSN 1397-4831.

WP 03-9 Anders Poulsen: On Efficiency, Tie-Breaking Rules and Role

Assignment Procedures in Evolutionary Bargaining. ISSN 1397-

WP 03-10 Anders Poulsen and Gert Tinggaard Svendsen: Rise and Decline
of Social Capital
– Excess Co-operation in the One-Shot Prisoner’s Dilemma
Game. ISSN 1397-4831.
WP 03-11 Nabanita Datta Gupta and Amaresh Dubey: Poverty and
Fertility: An Instrumental Variables Analysis on Indian Micro
Data. ISSN 1397-4831.

WP 03-12 Tor Eriksson: The Managerial Power Impact on Compensation –

Some Further Evidence. ISSN 1397-4831.

WP 03-13 Christian Bjørnskov: Corruption and Social Capital. ISSN 1397-


WP 03-14 Debashish Bhattacherjee: The Effects of Group Incentives in an

Indian Firm
– Evidence from Payroll Data. ISSN 1397-4831.

WP 03-15 Tor Eriksson och Peter Jensen: Tidsbegränsade anställninger –

danska erfarenheter. ISSN 1397-4831.

WP 03-16 Tom Coupé, Valérie Smeets and Frédéric Warzynski: Incentives,

Sorting and Productivity along the Career: Evidence from a
Sample of Top Economists. ISSN 1397-4831.

WP 03-17 Jozef Koning, Patrick Van Cayseele and Frédéric Warzynski:

The Effects of Privatization and Competitive Pressure on Firms’
Price-Cost Margins: Micro Evidence from Emerging Economies.
ISSN 1397-4831.

WP 03-18 Urs Steiner Brandt and Gert Tinggaard Svendsen: The coalition
of industrialists and environmentalists in the climate change
issue. ISSN 1397-4831.

WP 03-19 Jan Bentzen: An empirical analysis of gasoline price

convergence for 20 OECD countries. ISSN 1397-4831.

WP 03-20 Jan Bentzen and Valdemar Smith: Regional income convergence

in the Scandinavian countries. ISSN 1397-4831.

WP 03-21 Gert Tinggaard Svendsen: Social Capital, Corruption and

Economic Growth: Eastern and Western Europe. ISSN 1397-

WP 03-22 Jan Bentzen and Valdemar Smith: A Comparative Study of

Wine Auction Prices: Mouton Rothschild Premier Cru Classé.
ISSN 1397-4831.
WP 03-23 Peter Guldager: Folkepensionisternes incitamenter til at arbejde.
ISSN 1397-4831.

WP 03-24 Valérie Smeets and Frédéric Warzynski: Job Creation, Job

Destruction and Voting Behavior in Poland. ISSN 1397-4831.

WP 03-25 Tom Coupé, Valérie Smeets and Frédéric Warzynski: Incentives

in Economic Departments: Testing Tournaments? ISSN 1397-

WP 03-26 Erik Strøjer Madsen, Valdemar Smith and Mogens Dilling-

Hansen: Industrial clusters, firm location and productivity –
Some empirical evidence for Danish firms. ISSN 1397-4831.

WP 03-27 Aycan Çelikaksoy, Helena Skyt Nielsen and Mette Verner:

Marriage Migration: Just another case of positive assortative
matching? ISSN 1397-4831.


WP 04-1 Elina Pylkkänen and Nina Smith: Career Interruptions due to

Parental Leave – A Comparative Study of Denmark and Sweden.
ISSN 1397-4831.

WP 04-2 Urs Steiner Brandt and Gert Tinggaard Svendsen: Switch Point
and First-Mover Advantage: The Case of the Wind Turbine
Industry. ISSN 1397-4831.

WP 04-3 Tor Eriksson and Jaime Ortega: The Adoption of Job Rotation:
Testing the Theories. ISSN 1397-4831.

WP 04-4 Valérie Smeets: Are There Fast Tracks in Economic

Departments? Evidence from a Sample of Top Economists.
ISSN 1397-4831.

WP 04-5 Karsten Bjerring Olsen, Rikke Ibsen and Niels Westergaard-

Nielsen: Does Outsourcing Create Unemployment? The Case of
the Danish Textile and Clothing Industry. ISSN 1397-4831.

WP 04-6 Tor Eriksson and Johan Moritz Kuhn: Firm Spin-offs in

Denmark 1981-2000 – Patterns of Entry and Exit. ISSN 1397-
WP 04-7 Mona Larsen and Nabanita Datta Gupta: The Impact of Health
on Individual Retirement Plans: a Panel Analysis comparing
Self-reported versus Diagnostic Measures. ISSN 1397-4831.

WP 04-8 Christian Bjørnskov: Inequality, Tolerance, and Growth. ISSN


WP 04-9 Christian Bjørnskov: Legal Quality, Inequality, and Tolerance.

ISSN 1397-4831.

WP 04-10 Karsten Bjerring Olsen: Economic Cooperation and Social

Identity: Towards a Model of Economic Cross-Cultural
Integration. ISSN 1397-4831.

WP 04-11 Iben Bolvig: Within- and between-firm mobility in the low-wage

labour market. ISSN 1397-4831.

WP 04-12 Odile Poulsen and Gert Tinggaard Svendsen: Social Capital and
Market Centralisation: A Two-Sector Model. ISSN 1397-4831.

WP 04-13 Aditya Goenka and Odile Poulsen: Factor Intensity Reversal and
Ergodic Chaos. ISSN 1397-4831.

WP 04-14 Jan Bentzen and Valdemar Smith: Short-run and long-run

relationships in the consumption of alcohol in the Scandinavian
ISBN 87-7882-010-3 (print); ISBN 87-7882-011-1 (online).

WP 04-15 Jan Bentzen, Erik Strøjer Madsen, Valdemar Smith and Mogens
Dilling-Hansen: Persistence in Corporate Performance?
Empirical Evidence from Panel Unit Root Tests.
ISBN 87-7882-012-X (print); ISBN 87-7882-013-8 (online).

WP 04-16 Anders U. Poulsen and Jonathan H.W. Tan: Can Information

Backfire? Experimental Evidence from the Ultimatum Game.
ISBN 87-7882-014-6 (print); ISBN 87-7882-015-4 (online).

WP 04-17 Werner Roeger and Frédéric Warzynski: A Joint Estimation of

Price-Cost Margins and Sunk Capital: Theory and Evidence
from the European Electricity Industry.
ISBN 87-7882-016-2 (print); ISBN 87-7882-017-0 (online).
WP 04-18 Nabanita Datta Gupta and Tor Eriksson: New workplace
practices and the gender wage gap.
ISBN 87-7882-018-9 (print); ISBN 87-7882-019-7 (online).

WP 04-19 Tor Eriksson and Axel Werwatz: The Prevalence of Internal

Labour Markets – New Evidence from Panel Data.
ISBN 87-7882-020-0 (print); ISBN 87-7882-021-9 (online).

WP 04-20 Anna Piil Damm and Michael Rosholm: Employment Effects of

Dispersal Policies on Refugee Immigrants: Empirical Evidence.
ISBN 87-7882-022-7 (print); ISBN 87-7882-023-5 (online).


WP 05-1 Anna Piil Damm and Michael Rosholm: Employment Effects of

Dispersal Policies on Refugee Immigrants: Theory.
ISBN 87-7882-024-3 (print); ISBN 87-7882-025-1 (online).

WP 05-2 Anna Piil Damm: Immigrants’ Location Preferences: Exploiting

a Natural Experiment.
ISBN 87-7882-036-7 (print); ISBN 87-7882-037-5 (online).

WP 05-3 Anna Piil Damm: The Danish Dispersal Policy on Refugee

Immigrants 1986-1998: A Natural Experiment?
ISBN 87-7882-038-3 (print); ISBN 87-7882-039-1 (online).

WP 05-4 Rikke Ibsen and Niels Westergaard-Nielsen: Job Creation and

Destruction over the Business Cycles and the Impact on
Individual Job Flows in Denmark 1980-2001.
ISBN 87-7882-040-5 (print); ISBN 87-7882-041-3 (online).

WP 05-5 Anna Maria Kossowska, Nina Smith, Valdemar Smith and Mette
Verner: Til gavn for bundlinjen – Forbedrer kvinder i topledelse
og bestyrelse danske virksomheders bundlinje?
ISBN 87-7882-042-1 (print); ISBN 87-7882-043-X (online).

WP 05-6 Odile Poulsen and Gert Tinggaard Svendsen: The Long and
Winding Road: Social Capital and Commuting.
ISBN 87-7882-044-8 (print); ISBN 87-7882-045-6 (online).

WP 05-7 Odile Poulsen and Gert Tinggaard Svendsen: Love Thy

Neighbor: Bonding versus Bridging Trust.
ISBN 87-7882-062-6 (print); ISBN 87-7882-063-4 (online).
WP 05-8 Christian Bjørnskov: Political Ideology and Economic Freedom.
ISBN 87-7882-064-2 (print); ISBN 87-7882-065-0 (online).

WP 05-9 Sebastian Buhai and Coen Teulings: Tenure Profiles and

Efficient Separation in a Stochastic Productivity Model.
ISBN 87-7882-066-9 (print); ISBN 87-7882-067-7 (online).

WP 05-10 Christian Grund and Niels Westergård-Nielsen: Age Structure of

the Workforce and Firm Performance.
ISBN 87-7882-068-5 (print); ISBN 87-7882-069-3 (online).

WP 05-11 Søren Harck: AD-AS på dansk.

ISBN 87-7882-070-7 (print); ISBN 87-7882-071-5 (online).

WP 05-12 Søren Harck: Hviler Dansk Økonomi på en Cobb-Douglas

ISBN 87-7882-092-8 (print); ISBN 87-7882-093-6 (online).


WP 06-1 Nicolai Kristensen and Edvard Johansson: New Evidence on

Cross-Country Differences in Job Satisfaction Using Anchoring
ISBN 87-7882-094-4 (print); ISBN 87-7882-095-2 (online).

WP 06-2 Christian Bjørnskov: How Does Social Trust Affect Economic

ISBN 87-7882-096-0 (print); ISBN 87-7882-097-9 (online).

WP 06-3 Jan Bentzen, Erik Strøjer Madsen and Valdemar Smith: The
Growth Opportunities for SMEs?
ISBN 87-7882-098-7 (print); ISBN 87-7882-099-5 (online).

WP 06-4 Anna Piil Damm: Ethnic Enclaves and Immigrant Labour

Market Outcomes: Quasi-Experimental Evidence.
ISBN 87-7882-100-2 (print); ISBN 87-7882-101-0 (online).

WP 06-5 Svend Jespersen, Nicolai Kristensen og Lars Skipper: En kritik

af VEU-udvalgets arbejde.
ISBN 87-7882-159-2 (print); ISBN 87-7882-160-6 (online).

WP 06-6 Kræn Blume and Mette Verner: Welfare Dependency among

Danish Immigrants.
ISBN 87-7882-161-4 (print); ISBN 87-7882-162-2 (online).
WP 06-7 Jürgen Bitzer, Wolfram Schrettl and Philipp J.H. Schröder:
Intrinsic Motivation versus Signaling in Open Source Software
ISBN 87-7882-163-0 (print); ISBN 87-7882-164-9 (online).

WP 06-8 Valérie Smeets, Kathryn Ierulli and Michael Gibbs: Mergers of

Equals & Unequals.
ISBN 87-7882-165-7 (print); ISBN 87-7882-166-5 (online).

WP 06-9 Valérie Smeets: Job Mobility and Wage Dynamics.

ISBN 87-7882-167-3 (print); ISBN 87-7882-168-1 (online).

WP 06-10 Valérie Smeets and Frédéric Warzynski: Testing Models of

Hierarchy: Span of Control, Compensation and Career
ISBN 87-7882-187-8 (print); ISBN 87-7882-188-6 (online).

WP 06-11 Sebastian Buhai and Marco van der Leij: A Social Network
Analysis of Occupational Segregation.
ISBN 87-7882-189-4 (print); ISBN 87-7882-190-8 (online).


WP 07-1 Christina Bjerg, Christian Bjørnskov and Anne Holm: Growth,

Debt Burdens and Alleviating Effects of Foreign Aid in Least
Developed Countries.
ISBN 87-7882-191-6 (print); ISBN 87-7882-192-4 (online).

WP 07-2 Jeremy T. Fox and Valérie Smeets: Do Input Quality and

Structural Productivity Estimates Drive Measured Differences in
Firm Productivity?
ISBN 87-7882-193-2 (print); ISBN 87-7882-194-0 (online).

WP 07-3 Elisabetta Trevisan: Job Security and New Restrictive

Permanent Contracts. Are Spanish Workers More Worried of
Losing Their Job?
ISBN 87-7882-195-9 (print); ISBN 87-7882-196-7 (online).

WP 07-4 Tor Eriksson and Jaime Ortega: Performance Pay and the “Time
ISBN 9788778822079 (print); ISBN 9788778822086 (online).
WP 07-5 Johan Moritz Kuhn: My Pay is Too Bad (I Quit). Your Pay is
Too Good (You’re Fired).
ISBN 9788778822093 (print); ISBN 9788778822109 (online).

WP 07-6 Christian Bjørnskov: Social trust and the growth of schooling.

ISBN 9788778822116 (print); ISBN 9788778822123 (online).

WP 07-7 Jan Bentzen and Valdemar Smith: Explaining champagne prices

in Scandinavia – what is the best predictor?
ISBN 9788778822130 (print); ISBN 9788778822147 (online).

WP 07-8 Sandra Cavaco, Jean-Michel Etienne and Ali Skalli: Identifying

causal paths between health and socio-economic status:
Evidence from European older workforce surveys
ISBN 9788778822154 (print); ISBN 9788778822161 (online).

WP 07-9 Søren Harck: Long-run properties of some Danish macro-

econometric models: an analytical approach.
ISBN 9788778822390 (print); ISBN 9788778822406 (online).

WP 07-10 Takao Kato and Hideo Owan: Market Characteristics, Intra-Firm

Coordination, and the Choice of Human Resource Management
Systems: Evidence from New Japanese Data.
ISBN 9788778822413 (print); ISBN 9788778822420 (online).

WP 07-11 Astrid Würtz: The Long-Term Effect on Children of Increasing

the Length of Parents’ Birth-Related Leave.
ISBN 9788778822437 (print); ISBN 9788778822444 (online).

WP 07-12 Tor Eriksson and Marie-Claire Villeval: Performance Pay,

Sorting and Social Motivation.
ISBN 9788778822451 (print); ISBN 9788778822468 (online).

WP 07-13 Jane Greve: Obesity and Labor Market Outcomes: New Danish
ISBN 9788778822475 (print); ISBN 9788778822482 (online).


WP 08-1 Sebastian Buhai, Miguel Portela, Coen Teulings and Aico van
Vuuren: Returns to Tenure or Seniority
ISBN 9788778822826 (print); ISBN 9788778822833 (online).
WP 08-2 Flora Bellone, Patrick Musso, Lionel Nesta et Frédéric
Warzynski: L’effet pro-concurrentiel de l’intégration
européenne : une analyse de l’évolution des taux de marge dans
les industries manufacturières françaises
ISBN 9788778822857 (print); ISBN 9788778822864 (online).

WP 08-3 Erdal Yalcin: The Proximity-Concentration Trade-Off under

Goods Price and Exchange Rate Uncertainty
ISBN 9788778822871 (print); ISBN 9788778822888 (online)

WP 08-4 Elke J. Jahn and Herbert Brücker: Migration and the Wage
Curve: A Structural Approach to Measure the Wage and
Employment Effects of Migration
ISBN 9788778822895 (print); ISBN 9788778822901 (online)

WP 08-5 Søren Harck: A Phillips curve interpretation of error-correction

models of the wage and price dynamics
ISBN 9788778822918 (print); ISBN 9788778822925 (online)

WP 08-6 Elke J. Jahn and Thomas Wagner: Job Security as an

Endogenous Job Characteristic
ISBN 9788778823182 (print); ISBN 9788778823199 (online)

WP 08-7 Jørgen Drud Hansen, Virmantas Kvedaras and Jørgen Ulff-

Møller Nielsen: Monopolistic Competition, International Trade
and Firm Heterogeneity - a Life Cycle Perspective -
ISBN 9788778823212 (print); ISBN 9788778823229 (online)

WP 08-8 Dario Pozzoli: The Transition to Work for Italian University

ISBN 9788778823236 (print); ISBN 9788778823243 (online)

WP 08-9 Annalisa Cristini and Dario Pozzoli: New Workplace Practices

and Firm Performance: a Comparative Study of Italy and Britain
ISBN 9788778823250 (print); ISBN 9788778823267 (online)

WP 08-10 Paolo Buonanno and Dario Pozzoli: Early Labour Market

Returns to College Subjects
ISBN 9788778823274 (print); ISBN 9788778823281 (online)

WP 08-11 Iben Bolvig: Low wage after unemployment - the effect of

changes in the UI system
ISBN 9788778823441 (print); ISBN 9788778823458 (online)
WP 08-12 Nina Smith, Valdemar Smith and Mette Verner: Women in Top
Management and Firm Performance
ISBN 9788778823465 (print); ISBN 9788778823472 (online)

WP 08-13 Sebastian Buhai, Elena Cottini and Niels Westergård-Nielsen:

The impact of workplace conditions on firm performance
ISBN 9788778823496 (print); ISBN 9788778823502 (online)

WP 08-14 Michael Rosholm: Experimental Evidence on the Nature of the

Danish Employment Miracle
ISBN 9788778823526 (print); ISBN 9788778823533 (online)

WP 08-15 Christian Bjørnskov and Peter Kurrild-Klitgaard: Economic

Growth and Institutional Reform in Modern Monarchies and
Republics: A Historical Cross-Country Perspective 1820-2000
ISBN 9788778823540 (print); ISBN 9788778823557 (online)

WP 08-16 Nabanita Datta Gupta, Nicolai Kristensen and Dario Pozzoli:

The Validity of Vignettes in Cross-Country Health Studies
ISBN 9788778823694 (print); ISBN 9788778823700 (online)

WP 08-17 Anna Piil Damm and Marie Louise Schultz-Nielsen: The

Construction of Neighbourhoods and its Relevance for the
Measurement of Social and Ethnic Segregation: Evidence from
ISBN 9788778823717 (print); ISBN 9788778823724 (online)

WP 08-18 Jørgen Drud Hansen and Jørgen Ulff-Møller Nielsen: Price as an

Indicator for Quality in International Trade?
ISBN 9788778823731 (print); ISBN 9788778823748 (online)

WP 08-19 Elke J. Jahn and John Wegner: Do Targeted Hiring Subsidies

and Profiling Techniques Reduce Unemployment?
ISBN 9788778823755 (print); ISBN 9788778823762 (online)

WP 08-20 Flora Bellone, Patrick Musso, Lionel Nesta and Frederic

Warzynski: Endogenous Markups, Firm Productivity and
International Trade: Testing Some Micro-Level Implications of
the Melitz-Ottaviano Model
ISBN 9788778823779 (print); ISBN 9788778823786 (online)
WP 08-21 Linda Bell, Nina Smith, Valdemar Smith and Mette Verner:
Gender differences in promotion into top-management jobs
ISBN 9788778823830 (print); ISBN 9788778823847(online)

WP 08-22 Jan Bentzen and Valdemar Smith: An empirical analysis of the

relationship between the consumption of alcohol and liver
cirrhosis mortality
ISBN 9788778823854 (print); ISBN 9788778823861(online)

WP 08-23 Gabriel J. Felbermayr, Sanne Hiller and Davide Sala: Does

Immigration Boost Per Capita Income?
ISBN 9788778823878 (print); ISBN 9788778823885(online)