Immigrant assimilation pre and post labour market entry: evidence from the UK Labour Force Survey

We estimate models of employment an earnings for a sample of white and non-white male immigrants drawn from the Labour Force Survey between 1993 and 2004. Immigrants who arrived to enter the labour market (labour market entrants) are distinguished from those who arrived to complete their education (education entrants). Diverse patterns of labour market assimilation are found depending on ethnicity and immigrant type. Amongst labour market entrants, whites do better than non-whites, whilst amongst education entrants, highly qualified prime-age non-whites perform as well as their white counterparts. Relative to white natives, labour market outcomes for all immigrant groups have a tendency to decline with age.

Labor market transitions of immigrants with emphasis on marginalization and self-employment

In developed countries, immigrants are more likely to be nonemployed and self-employed compared to natives. Based on register data of male immigrants in Denmark, we performed a detailed investigation of the immigrant–native difference in transition patterns across labor market states. We find that a high proportion of immigrants from non-Western countries tend to be marginalized relative to natives, and they tend to use self-employment to escape marginalization.

The influence of market wages and parental history on child labour and schooling in Egypt

This paper examines the influence of adult market wages and having parents who were child labourers on child labour, when this decision is jointly determined with child schooling, using data from Egypt. The empirical results suggest that low adult market wages are key determinants of child labour; a 10% increase in the illiterate male market wage decreases the probability of child labour by 22% for boys and 13% for girls. The findings also indicate the importance of social norms in the intergenerational persistence of child labour: parents who were child labourers themselves are on average 10% more likely to send their children to work. In addition, higher local regional income inequality increases the likelihood of child labour.

Too many migrants, too few services: a model of decision-making on immigration and integration with cultural distance

We model the political demand for immigrants as a trade-off that native voters face between having services, assumed to be produced only by unskilled and nonassimilated immigrants, and experiencing disutility due to the immigrant workers having a culture different from the native culture. Immigrants decide whether to integrate into the native culture. We show that if services are priced according to per unit costs, the market demand for immigrants will exceed the political demand. Market forces then lead to higher services prices, implying that the initially allowed number of immigrants is ‘politically’ too large.

The Place of Place: Location and Immigrant Economic Well-being in Canada

In recent years, successive cohorts of immigrants to Canada have experienced a striking level of deterioration in their economic well-being. At the same time, more immigrants than ever before are choosing to live in Montréal, Toronto, or Vancouver, Canada’s three-first-tier or ‘gateway cities’. This paper uses instrumental variable regression techniques to determine the extent to which gateway city clustering is related to immigrant economic well-being. It identifies whether employment status, earnings, and employment suitability would significantly improve if more immigrants chose to live outside of Canada’s three gateway cities. The results suggest that, for the most part, although immigrants do worse than the native-born in gateway cities, they do experience marginally higher earnings than their non-gateway counterparts. Income and unemployment rates are higher for immigrants in gateway cities than they are for the native-born, but the gateway/non-gateway disparity is minimal. Levels of employment mismatch are substantially higher in gateway cities, compared to both the gateway city native-born population, and non-gateway immigrants. An analysis of the data shows that only marginal improvements to economic well-being would result from an increase in non-gateway immigration, and that there are other factors, like race or skin colour, that seem to be more closely linked to labour market success.

The role of marriage in immigrants’ human capital investment under liquidity constraints

This paper presents a two-period human capital investment model, which is used to study the optimal investment decisions of credit-constrained married immigrants relative to single immigrants and native couples facing a perfect capital market. The model predicts that: (1) The comparative advantage in investment in local skills of one of the spouses may emerge from his/her higher growth rate of imported human capital. (2) The optimal investment of each spouse is non-increasing in the level of imported human capital of the spouse with the comparative advantage in investment, while it is non-decreasing in the level of imported human capital of the other spouse. (3) When two immigrants get married, the spouse with the comparative advantage in investment invests more than when he/she was single whereas the other spouse invests less.

Regional mismatch and unemployment: theory and evidence from Italy, 1977–1998

We describe the functioning of a two-region economy characterized by asymmetric wage setting. Labour market tightness in the leading-region affects wages in the whole economy. In equilibrium, net labour demand shifts towards the leading region raise unemployment elsewhere and leave regional wages unchanged, causing an increase in aggregate unemployment. Based on SHIW micro-data on earnings, we find strong evidence that wages in Italy only respond to Northern unemployment. We estimate that around 33% of the increase in Italian unemployment during 1977–1998 can be explained by regional mismatch, mainly due to an excess labour supply growth in the South.

The effect of immigration on the labor market performance of native-born workers: some evidence for Spain

This paper provides an approximation to the labor market effects of immigrants in Spain, a country where labor market institutions and immigration policy exhibit some peculiarities, during the second half of the 1990s, the period in which immigration flows accelerated. By using alternative data sets, we estimate both the impact of legal and total immigration flows on the employment rates and wages of native workers, accounting for the possible occupational and geographical mobility of immigrants and native-born workers. Using different samples and estimation procedures, we have not found a significant negative effect of immigration on either the employment rates or wages of native workers.

Labour mobility and regional disparities: the role of female labour participation

Unemployment rates, as well as income per capita, differ vastly across the regions of Europe. Labour mobility can play a role in resolving regional disparities. This paper focuses on the questions of why labour mobility is low in the EU and how it is possible that it remains low. We explore whether changes in male and female labour participation act as an important alternative adjustment mechanism. We answer this question in the affirmative. We argue that female labour participation is very important in adjusting to regional disparities.

The substitutability of labor between immigrants and natives in the Canadian labor market: circa 1995

This paper examines the substitutability or complementarity between Canadian-born and immigrant workers. These are examined by estimating a set of wage equations using a generalized Leontief production function. The paper finds that, in general, there is no displacement of Canadian-born workers by immigrants. Recent immigrants affect the native-born positively, while older immigrants are neither substitute nor complement for natives. However, the effects differ across industries. Overall, the evidence that immigrants harm the opportunities of native-born workers is scant.

Assimilation effects on poverty among immigrants in Norway

This paper discusses the question of whether or not the high incidence of poverty among immigrants in Norway persists even after immigrants have been in the country for a long period, i.e. after they have had the opportunity to integrate and adapt their skills to the expectations in their new home. While similar to traditional studies of wage assimilation, a study of assimilation in relation to poverty propensity nevertheless measures something different than labor market assimilation, and this represents the main innovation of this study. Analysis of assimilation with respect to poverty focuses on welfare for the lower end of the income distribution and for all individuals, regardless of their relationship with the labor market. It can therefore be seen to better reflect the degree to which immigrants as a whole are able to achieve at least the minimum necessary to participate in the life of their new home and avoid difficulties later on.

The dynamics of immigrant welfare and labor market behavior

This paper analyzes transitions into and out of social assistance, unemployment, and employment. We estimate a dynamic multinomial logit model, controlling for endogenous initial condition and unobserved heterogeneity, using a large representative Swedish panel data set. The empirical results suggest that particularly refugee immigrants display a greater degree of “structural” state dependence than natives. The high welfare participation rates among refugee immigrants may be due to the existence of a “welfare trap”, while participation among natives and non-refugee immigrants is largely due to permanent unobserved characteristics. These results suggest that welfare reforms may have differential effects on refugee immigrants and natives.

Production and consumption externalities of human capital: an empirical study for Italy

The estimation of the effect of local human capital on wages only might not identify properly human capital spillovers. Appropriate identification requires considering the joint effect of local human capital on both wages and rents. Empirically, we study the effects of local human capital on household-level rents and individual-level wages for a sample of Italian local labour markets. Our results show a positive and robust effect of local human capital on rents, supporting the idea that human capital generates positive externalities at the local level. Our results also suggest that consumption and production externalities have a similar impact on wages.

Dropping out of post-compulsory education in the UK: an analysis of determinants and outcomes

We analyse the decision to drop out of post-compulsory education over the period 1985–1994 using data from the Youth Cohort Surveys. We show that the dropout rate declined between 1985 and 1994, in spite of the rising participation rate in education, but is still substantial. Dropping out is more or less constant over the period of study, though the risk of dropout does vary with young people’s prior attainment, ethnicity, family background and the state of the labour market. The course of study has a substantial effect on the risk of dropout.

Sacrificing Their Careers for Their Families? An Analysis of the Penalty to Motherhood in Europe

This paper examines the extent of and the mechanisms behind the penalty to motherhood in six European countries. Each country provides different levels of support for maternal employment allowing us to determine institutional effects on labour market outcome. While mothers tend to earn less than non-mothers, the penalty to motherhood is considerably lower in countries with policy support for working mothers. The paper establishes the United Kingdom and West Germany to have the least policy support for working mothers as well as the largest penalties to motherhood.

The Extent of Economic Vulnerability in the Canadian Labour Market and Federal Jurisdiction: Is There a Role for Labour Standards?

This paper characterizes vulnerable workers in Canada and the federal jurisdiction, based upon characteristics such as employment status, demographic characteristics, and job characteristics, and identifies areas in which labour standards may have a role. Based on this analysis, the paper evaluates the potential for labour standards to address economic vulnerability, focusing on labour standards policies aimed at wages and benefits, hours, and employment arrangements. In addition, the analysis considers the extent to which labour standards are likely to reach vulnerable workers. The results suggest several potential roles for labour standards and highlights policy implications.

Shifts in attitudes and labor market discrimination: Swedish experiences after 9-11

We present longitudinal survey data suggesting that the terrorist attacks in the USA on September 11, 2001, changed attitudes toward certain minorities in Sweden. This finding is consistent with results in previous studies. To investigate whether this change in attitudes also affected the labor market situation of these minorities, we study unemployment exit around 9-11 using detailed data on the entire Swedish working-age population. Contrary to what may be expected from many theories of labor market discrimination, the time pattern of exits and entries for different ethnic groups, as well as difference-in-differences analyses, shows no sign of increased discrimination toward these minorities. A possible explanation for this result is that employers act rationally in their hiring decisions and do not respond to changes in attitudes toward immigrants as a group.

Immigration as a commitment device

This paper shows that the admittance of immigrants who are on average less skilled than natives can be part of a support-maximizing government policy despite a general political bias in favour of the poor. We make this point in a simple model with redistributive unemployment insurance. Once wage contracts are binding, the government has an incentive to increase the unemployment benefit, which leads to excessive unemployment. Affecting the political balance within the constituency, immigrants can serve as a commitment device against this time inconsistency. We show that this possibility can be greatly promoted by restrictions on political naturalization.

Post-migration investments in education and job search: a family perspective

This paper examines post-migration investments in schooling and job search of immigrant families using new longitudinal data for Australia. Higher education levels at the time of arrival are associated with a greater probability of enrolling in school after migration. In households where the visa category would suggest that post-migration investments might be important, we find higher rates of school enrolment and job search. Traditional gender roles appear to dictate which partner makes the investments in formal schooling. However, labour market advantage, captured by principal applicant status, appears to dictate which partner makes greater investments in job search.

The impact of the labour market on the timing of marriage and births in Spain

This paper investigates how education and the labour market affect Spanish individual decisions on the timing of marriage and births, using a Cox hazard approach. It disentangles men and women, and two groups, Cohort 1945–1960 and Cohort 1961–1977. Results show that female employment delays marriage in Cohort 1945–1960, but it has a reverse effect in Cohort 1961–1977. We also find evidence that employment is a barrier for family formation since employed women postpone births in both cohorts. The precarious Spanish labour markets, captured by female unemployment rates, delay family formation, especially by putting off marriage. Male unemployment, at the individual level, impacts negatively on fertility only through delaying marriage.