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In this paper we employ a wage-setting approach to analyze the labor market effects of immigration into Germany from 1980 to 2004. This enables us to consider labor market rigidities, which are prevalent in Europe. We find that the elasticity of the wage-setting curve is particularly high for young workers. Moreover, natives and foreigners are imperfect substitutes. The wage and employment effects of immigration depend on the skill structure of the immigrant workforce. Because the foreign labor supply shift has mainly affected the high-skilled labor market segment, the 4 percent increase of the workforce through immigration has not increased either aggregate or foreign unemployment. [ABSTRACT FROM AUTHOR]

The article discusses the skills of employability in Germany and Great Britain. It mentions that such condition is considered the principle in driving the labour market throughout Europe for 20 years and conceived as a strategy in battling unemployment. It also explores the national embedding of its concept, its association with competence and the role of a person towards its realization.