A Note on Dual Internal Labor Markets and Wages of Temporary Workers: Evidence from Linked-Employer-Employee Data

I use linked employer-employee data from the German Federal Statistical Office to estimate within-firm wage differentials between temporary workers with fixed-term contracts and workers with permanent contracts in the context of dual internal labor markets. Wage-tenure profiles of permanent workers are estimated separately for each firm to obtain a proxy for the prevalence of internal labor markets. Temporary workers earn significantly lower wages in firms with steeper wage-tenure profiles. This finding is consistent with the segmentation in a primary permanent workforce with high wages and a secondary temporary workforce with low wages, if internal labor markets are more prevalent.     

Work-related health factors for female immigrants in Sweden

Work-related health has been a focus of research since the rate of sickness-related absences began to increase in Sweden. The incidence of sickness-related absences and early retirement is higher among female immigrants than among others in the total population. This study is based on a questionnaire survey which was conducted in a municipality in Sweden. The study population consisted of 2 429 native and immigrant female employees. The aim was to study work-related health factors for female immigrants. The results of this study show that about 20% of female immigrants who participate in the survey have temporary employment while the proportion is 8% for native women. The perception of ethnic discrimination among female immigrants was three times as much as among native females. The results also show that 69% of female immigrants report having received no opportunity to discuss their wages with managers, in comparison to 63% of native females. About 40% of female immigrants and 35% of native women report that they do not get opportunities to upgrade their skills. Female immigrants over the age of 50 experience gender and ethnic discrimination and lack of access to skills training programs more often than younger immigrants. They also participate in health-care activities more often.     

An Auction Model of Canadian Temporary Immigration for the 21st Century

Temporary Canadian immigration has grown beyond traditional programs for students, caregivers and agricultural workers to include trade-related temporary visas under NAFTA and the GATS. Current Canadian debates envision supplanting Canada's permanent immigration programme with a temporary visa programme to remove skill shortages. Several questions emerge under these temporary schemes including who should choose the number of temporary immigrants and under what employment conditions. This paper offers an alternative policy to the current government-determined quota on temporary visas to answer these two questions. Under the proposed scheme offered in this paper, a Canadian worker can place a job voucher up for auction on the Internet. If the Canadian worker finds an acceptable offer for his one-year (or less) voucher, then the temporary immigrant is permitted to seek a job in Canada. Thus, under this auction scheme Canadian workers are compensated for the presence of temporary immigrants, and the actual number of temporary immigrants admitted depends on the total number of Canadian workers who sell their vouchers, not on a government fat.     

WAGES, EARNINGS AND HOURS OF FIRST, SECOND, AND THIRD GENERATION AMERICAN MALES

Analysis of 1970 census data for eight ethnic groups indicates that, other things equal, recent immigrants generally receive lower wages and earnings than second generation workers, but second generation workers receive higher wages and earnings than do third. Recent immigrants and third generation men work significantly fewer hours per year than do earlier immigrants and second generation men. These findings are consistent with the hypothesis that increases in U. S. specific human capital over generations are offset by decreases in motivation. The higher motivation of immigrants appears to reflect greater preference for money over family ties, leisure, and easy work as compared with non-immigrants. immigrants.     

Come Back or Stay? Spend Here or There? Return and Remittances: The Case of Moldova

This paper examines the determinants and consequences of temporary and permanent migration from the perspective of migrant source countries. Based on a large and detailed household dataset on migration in the Republic of Moldova, the most important factors that influence a respective migrant’s decision whether to return to the home country or to stay abroad for good are presented first. Second, the remittance behaviour of temporary and permanent migrants is analysed to investigate how developing countries benefit from either type of migration. The results indicate that the most important determinants of permanent migration relate to the economic conditions at home and abroad, as well as to the legal status of a migrant in the host country. Furthermore, economic and political frustration plays an important role in the decision of permanent migrants not to come back. On the contrary, family ties as measured by the number of close family members at home act as a pull factor for migrant return. Interestingly, permanent migrants use source country networks that differ from those of temporary migrants, indicating that the return decision of individuals is influenced by the decision of their migrant peers. Concerning remittances, the results reveal that, in absolute terms, temporary migrants remit around 30 per cent more than their permanent counterparts. This outcome is surprising, because temporary migrants often reside in countries where wages are much lower. Overall, the findings indicate that when compared to permanent migration, temporary migration is favourable for developing countries, as it fosters not only repatriation of skills, but also higher remittances, and home savings.     

Failure to absorb: remigration by immigrants into Israel

"Hypotheses about remigration by immigrants are investigated using longitudinal data from the 1970s for immigrants to Israel. The main finding is that experience of unemployment during the first year in Israel does not, on the whole, help predict subsequent remigration. The propensity to remigrate varies inversely with age for most groups, and it increases if the immigrant has not acquired permanent housing. Immigrants on temporary resident visas are naturally more prone to remigrate in the short run. The well-educated and the young are more likely to be temporary residents."     

Immigration and the Wages of Native Workers: Spatial versus Occupational Approaches

Using data from the Current Population Survey, we study the impact of the increasing proportion of immigrants on the wages of native workers. Two different approaches are contrasted. The most common method has been the spatial approach that uses some geographic unit of analysis to investigate the multivariate association between the proportion of immigrants and the wages of native workers. Previous studies using the spatial approach have generally found little evidence of a significant negative effect. We propose, however, a contrasting method that represents an occupational approach in which occupations are the unit of analysis to investigate the impact of the proportion immigrant. This occupational approach avoids the bias that is inherent in the spatial approach due to the endogenous nature of immigrants' decisions about where to reside and the economic opportunities of local areas. In contrast to the spatial approach, our results using the same data but employing the occupational approach yield consistently negative net effects of the proportion immigrant on the wages of native workers during the period from 1994 to 2006.     

Die Persistenz ethnischer Ungleichheit auf dem deutschen Arbeitsmarkt

In the German labor market former labor immigrants and their descendents still occupy lower positions. In contrast to the early phase of in-migration nowadays most of the obvious structural reasons for ethnic stratification have vanished. Therefore, remaining inequalities could either be due to processes of discrimination or may result from immigrants’ permanent under-investment in human capital. In this contribution we present theoretical arguments and empirical results why the latter mechanism seems to be more important for the situation in the German labor market. Using data of the micro-census 1996 we analyze, whether labor market positions of immigrants are still lower controlling for generation and education. The findings are rather clear-cut: nearly all labor market disadvantages of the second generation can be traced back to educational differences.     

INTERMARRIAGE AND THE LABOR MARKET OUTCOMES OF ASIAN WOMEN

The impact of intermarriage with natives, on labor market outcomes of immigrants, is not homogeneous across ethnic groups. Wages of Asian women are compared with non‐Asians. Both ordinary least squares and instrumental variables estimates of the effects of intermarriage on the wages of Asian women are negative and significant. Non‐Asian women earn a wage premium that becomes insignificant when controls for selection into marriage are introduced. One possible explanation for the intermarriage penalty for Asians is an income effect of having a high‐earning native husband. Intermarriage penalties rise with husband's education. Assimilation patterns of intermarried Asians indicate that they have lower initial wages, market hours, and employment, but exhibit faster rates of growth over their years of stay. The results are robust across Asian subgroups and husband's ethnicity. (JEL J16, J12, J31, J61)     

Self-employment and earnings among immigrants in Australia

This article contributes to the small Australian literature on the earnings of immigrants in the self-employment sector. Earnings functions for both the foreign-born and Australian-born are estimated, and the results show that compared with native-born workers, foreign-born workers have higher earnings in the wage/salary sector but lower earnings in the self-employment sector.
Among the foreign-born, the results suggest that self-employed immigrants are less skilled compared with those who are wage/salary employed. Thus, low-skilled immigrants may be forced into self-employment.
There is no evidence of immigrant "catch-up" in the self-employment sector. Among wage/salary workers, however, immigrant wages are characterized by a "catch-up" effect.     

Stepping from Illegality to Legality and Advancing towards Integration: The Case of Immigrants in Greece1

This paper highlights how the social and economic situation of immigrants changes after their formal legalization and discusses what they nave to go through for their complete integration. Legalization can hardly solve the problem of immigrant employment, nor can it pull all immigrants out of the underground labor market and integrate them into the Greek economy ana society. The process towards complete integration is painful and involves a series of successive phases of various durations. During this period, apart from economic conditions, various institutional and cultural factors can hinder or delay integration. With respect to economic integration, immigrants seem to fare rather well. Their official unemployment rate is only slightly higher than the Greek unemployment rate, the two rates converging over time. This suggests increasing relative opportunities for immigrant employment, precarious or stable as it might be. Immigrant jobs come as a result of their flexible adjustment to the needs of the labor market ‐ official or underground ‐ compared to the inflexibility in the supply of Greek workers, due to labor mismatches and relatively high reservation wages. Wages of immigrants are generally lower, but are approaching the wages of their Greek counterparts. Educated immigrants much more than educated Greeks are forced by the circumstances to exercise jobs not measuring up to their qualifications.     

Women and changes in the Chilean economy: some questions

The author argues that a new development model that encourages greater participation of women in the work force in domestic piecework, temporary work, and subcontracting may further lead to the exploitation of women in Chile. The importance of women in economic development in Chile should be based on building skills, providing support child care services, reorienting women's education, and tax incentives. Chile over the past decade has achieved relatively stable economic growth and increased employment of women. During 1990-93 the growth of women in the work force increased at a rate of 16.8%, while men's presence increased by only 9.8%. The Chilean economy is based on a sophisticated modern sector and a labor-intensive informal sector. The Chilean model of development relies on cheap, flexible labor and a government approval of this model. Increased participation of women in the labor force is usually perceived as increased economic empowerment. A 1994 Oxfam study found that women were being forced into the labor market due to declines in family income and low wages. 46% of men and women received wages that did not cover basic necessities. The Chilean labor market is gender-stratified. Men are paid better than women for the same work. Men are in more permanent positions. Labor laws are either inadequate or violated, particularly for hours of work and overtime pay and conditions of employment and benefits. Traditional female jobs are those that rely on women's natural attributes. These unskilled attributes are rewarded with low wages. Little opportunity is provided for upgrading skills or acquiring new skills. Some women turn down advancement because of a lack of role models. Women have little opportunity to develop their self-image as workers. Poor self-images affect women's work attitudes and motivation. Some firms use competition between women to boost production. Chilean women remain in subordinate roles.     

Comparing European and North American international migration

International migration is a vast, complex, and heterogeneous field of study. It requires not only knowledge about dynamic processes in the past and at present and in various regions of the world, but also interdisciplinary cooperation, not least in order to achieve a good theoretical development. Theories about international migration tend to be built on particular periods or regions. The test of these theories comes through comparative research. A comparison of North American and European immigration and immigration policy could examine 1) whether immigration is permanent or temporary, 2) the desire of Europeans for short-term immigration to allow the integration of the large numbers of immigrants from the recent past, 3) the differential development of welfare states, 4) the likely long-term outcome of large waves of immigration, and 5) the legal status of aliens.     

Family formation and marital selectivity among Colombian and Dominican immigrants in New York City

"Utilizing data from a 1981 survey of Dominican and Colombian immigrants to New York City, and from 1975 marriage certificates for the entire city, this article describes the extent of family formation in the U.S. and patterns of marital selectivity of recent Hispanic immigrants residing in New York City. A core goal of the analysis is the provision of indicators of the extent of and nature of integration processes at an early stage of the immigration." It is found first that "Hispanic immigrants in New York City are clearly long-term settlers, although not necessarily permanent ones. They are forming nuclear families in this country to a considerably greater extent than they are either transferring families from the origin country or residing as unattached temporary migrants. Second, a significant minority of marriages contracted in this country are with spouses of different national origin groups, indicating an openness in ethnic boundaries in the host society context."     

International migration policies: conceptual problems

Kritz reviews national concepts and policies of migration. She examines how nation-states approach migration and how they define who is a migrant. Policies for permanent, temporary, and illegal migrants are examined for selected countries. While the traditional permanent immigration countries--Australia, Canada, New Zealand, and the US--continue to admit large numbers of permanent migrants, they are also admitting growing numbers of temporary migrants. Other countries, in Europe and the developing world, have different migration histories and use other approaches to admit foreigners--migrants are generally admitted on a temporary basis for work or other purposes. Growing numbers of these temporary migrants, however, do become long-term or permanent settlers, and the distinction between permanent and temporary migration policies becomes a short-term legal one rather than a long-term sociological one. Governments have been seeking those policy instruments that would allow them to improve control over who enters and settles in their territories, and temporary migration policies are the measures to which they are turning. While increasing restriction characterizes the policy stance of most countries toward international migration, this does not necessarily mean that the number of migrants entering is declining. Kritz argues that the concepts employed by countries in their immigration policies frequently do not correspond to the reality, making it necessary to examine the actual context.     

The Causes and Consequences of Immigrant Labour in the Construction Sector in Malaysia

Malaysian construction is highly dependant on immigrant labour; immigrants account for nearly 70 per cent of its workforce. Although they have aided the sector's rapid expansion, it has not been without costs. This paper examines the impact of immigrant labour on construction. The main finding is that immigrants, being largely unskilled, did not contribute to skill formation. Instead, they accumulated skills on‐the‐job, which were lost when they returned home. There was no evidence that immigrants displaced domestic workers since they were concentrated in jobs rejected by Malaysians. Furthermore, unlike in earlier periods, legal immigrants were no longer a cheap option, given the regulations governing their employment. They were not used to cut costs per se, but were used because domestic workers were not available in sufficient numbers. Despite the large immigrant presence, the general wage level increased, though admittedly not as rapidly as it might have in their absence. The reliance on immigrant workers has increased the need for supervision and quality control, thereby reducing the savings in cost; nonetheless, immigrants have helped keep costs in check. Surprisingly, rising wages and the continued shortage of labour have not led to a widespread adoption of labour‐saving methods. This is partly because productivity increases have managed to outpace wage increases, though this advantage is petering out. Also, immigrant presence has kept wages, as a proportion of total costs, manageable. The over reliance of the sector on immigrant labour is not desirable, especially since the majority is drawn from one source ‐ Indonesia. Any disruption of supply from this source can undermine the Malaysian economy. To avoid this, Malaysia must vary its source of immigrant labour and intensify efforts to attract domestic workers by improving conditions in construction.     

WAGE DIFFERENTIALS ACROSS LABOR MARKETS AND WORKERS: DOES COST OF LIVING MATTER?

Wage differential studies rarely account for interarea differences in cost of living, owing both to data limitations and theoretical ambiguity. This study develops a price index for 185 metropolitan areas comprising about 70% of the U.S. labor force. Current Population Survey data for 1985–95 and data on site-specific amenities are used to estimate earnings differentials based on nominal wages, wages fully adjusted for measured cost of living, and a simple approximation of "real" wages with partial adjustment for price-level differences. Dispersion in approximate real wages across 185 labor markets and differentials by region and city size are substantially lower than dispersion in nominal or full adjustment wages. Estimates of racial and ethnic differentials display moderate sensitivity to choice of a wage measure, whereas other standard differentials do not. Both nominal wages and wages fully adjusted for cost of living may provide misleading estimates of real wage differentials. Absent data on interarea prices and amenities, researchers should include detailed controls for region and city size in nominal wage equations. ( JEL J31, R23)     

THE RELATIVE STICKINESS OF WAGES AND PRICES

While many modern business cycle theories posit the existence of nominal wage and/or output price stickiness, their relative importance remains an unsettled issue. Using a structural VAR model, this paper exploits evidence on the behavior of real wages to assess the relative importance of these two sources of stickiness. The empirical results suggest that a positive shock to aggregate demand causes a significant temporary fall in real wages. This is taken as evidence that sticky wages have played a more important role than sticky prices in transmitting aggregate demand shocks to real economic activity in the post-war U.S. (JEL E32)     

Racialized Labour Market Incorporation? African Immigrants and the Role of Education‐Occupation Mismatch in Earnings

U.S. immigration policy debates increasingly center on attracting highly‐skilled immigrants. African immigrants, in particular, exhibit high levels of over‐education. But questions remain about whether African immigrants’ skills are appropriately utilized in the U.S. labour market. This paper uses U.S. Census and American Community Survey data to determine whether Africans’ over‐education leads to a corresponding wage disadvantage. I also investigate whether search and match, imperfect transferability, or queuing theory describes African immigrants’ wage outcomes. I find that, while African and Asian immigrants have similarly high rates of college education and over‐education, Africans experience significantly larger wage disadvantages due to over‐education. African immigrants’ low wages are closer to that of U.S. and Caribbean‐born blacks indicating that queuing theory describes their wage disadvantage. These findings suggest the need for policy addressing racial disparities in the labour market rather than new immigration policy.     

STICKY WAGES AND IMPLICIT CONTRACTS: A TRANSACTIONAL APPROACH

Sticky wages have been explained in the recent implicit contracts literature as a risk shifting device. Risk averse employees purchase insurance via an implicit contract from risk neutral firms. This paper offers an alternative explanation of the phenomenon. Various alternative organizational forms for labor markets are analyzed from a transactions cost viewpoint. Observed labor market institutions (including sticky wages) are seen as ways to economize on transactions costs. In fact, it is argued that sticky wages would be observed even if workers were risk neutral. Thus the emphasis on risk shifting in the implicit contracts literature seems misplaced.
A fall (in price) arising from temporary distress will be attended probably with no correspondent fall in the rate of wages: for the fall in price, and the distress, will be understood to be temporary, and the rate of wages, we know, is not so variable as the price of goods.