Immigrant unemployment: the Australian experience

"Between 1980 and 1996 both male and female immigrants experienced higher unemployment rates than Australia-born workers....A multivariate analysis is used in this article to examine unemployment rate differentials between Australia-born and immigrants from English-speaking countries and immigrants from non-English-speaking countries. A feature of the analysis is decomposition of unemployment rate differences between birthplace groups into a component attributable to the different characteristics of the birthplace groups (e.g. different mean levels of education) and a part that is viewed as an impact associated simply with being foreign born." (EXCERPT)     

LABOR MARKET PERFORMANCE EFFECTS OF DISCRIMINATION AND LOSS OF SKILL

We examine the impact of discrimination on labor market performance when workers are subject to a risk of losing skills during an unemployment experience. Within a search and matching framework, we show that both natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment to increase in the other sector and the effect on labor market performance therefore depends on whether discrimination is present in only one sector or in both. Discrimination may induce workers to train more or less than natives after having lost their skills, dependent upon in which sector there is discrimination. Net output tends to be most negatively affected by discrimination among high‐skilled workers. (JEL J15, J31, J61, J64, J71)     

Sociology as a Strategy of Support for Long-Term Unemployed Workers

In recent years workers in the United States have become increasingly vulnerable to spells of long-term unemployment, which are often accompanied by self-devaluation and the internalization of stigma. The existing literature consistently finds that dominant self-help career support institutions activate individualistic cultural narratives that obscure the shared and structural determinants of career challenges and often intensify the self-stigmatization and emotional toll of long-term unemployment. This paper examines an alternative approach to support based on sociologically-informed discourses and practices. Drawing on in-depth interviews of long-term unemployed white-collar workers who received such support we explore whether and how sociologically-informed support practices can reduce self-stigmatization and help workers confront the challenges posed by long-term unemployment. We show that self-stigmatization is not an inevitable outcome of unemployment in the American cultural context, and that the application of a sociologically-informed approach to support can activate narratives focused on the shared and structural roots of unemployment. The activation of such narratives counteracts the debilitating internalization of stigma and generates what we call a “re-valuation” of the self. Beyond long-term unemployment, the findings in this paper suggest broader benefits to American workers from institutions that foster a sociological imagination for contextualizing employment-related challenges.     

Propensity of Canada's Foreign‐born to Claim Unemployment Insurance Benefits

This article examines the relationship between claiming unemployment insurance benefits in Canada and the immigrant class under which immigrants were admitted (namely skilled workers, assisted relatives, family class, refugees), using a new data set that combines income tax and immigration records. Claims rates (or the proportion of immigrants who claimed unemployment insurance benefits) are calculated for each immigrant landing class for the cohorts of immigrants who landed in 1980, 1985 and 1989; for each cohort, annual claims rates are presented from the year after landing to 1995. The claims rates indicate that there are significant differences among the different immigrant landing classes: those admitted as skilled workers have relatively low claims rates, those in the family class or assisted relatives have higher rates, and refugees have the highest rates. For all immigrant landing classes, claims rates rise rapidly during the two or three years after arrival in Canada, but decline thereafter for all classes. Differences in claims rates on unemployment insurance benefits remain across the immigrant landing classes after general economic conditions and some characteristics of the immigrants are controlled.     

The Occupational Cost of Being Illegal in the United States: Legal Status,Job Hazards,and Compensating Differentials

Considerable research and pervasive cultural narratives suggest that undocumented immigrant workers are concentrated in the most dangerous, hazardous, and otherwise unappealing jobs in U.S. labor markets. Yet, owing largely to data limitations, little empirical work has addressed this topic. Using data from the 2004 and 2008 panels of the Survey of Income and Program Participation, we impute legal status for Mexican and Central American immigrants and link their occupations to Bureau of Labor and Statistics (BLS) data on occupational fatalities and occupational hazard data from the U.S. Department of Labor to explore racial and legal status differentials on several specific measures of occupational risk. Results indicate that undocumented workers face heightened exposure to numerous dimensions of occupational hazard – including higher levels of physical strain, exposure to heights, and repetitive motions – but are less exposed than native workers to some of the potentially most dangerous environments. We also show that undocumented workers are rewarded less for employment in hazardous settings, receiving low or no compensating differential for working in jobs with high fatality, toxic materials, or exposure to heights. Overall, this study suggests that legal status plays an important role in determining exposure to job hazard and in structuring the wage returns to risky work.     

The Global Welfare Economics of Immigration

We study the effect of immigration on global welfare. The world is modeled as consisting of two regions, South and North, the former populated by low-skill workers, and the latter by both low- and high-skill workers. Production in the North uses both labor inputs in a complementary way. A trade union in the North keeps the wage of low-skill workers above the Walrasian wage, generating unemployment of low-skill workers. Northern citizens fund unemployment benefits for workers through taxation. Immigration from South to North has two effects in the North: a mixed native-foreign working-class lowers union power, because of reduced solidarity among low-skill workers, and hence it lowers the mark-up on the Walrasian wage that the union is able to negotiate. It also lowers the solidarity between employed citizens and the unemployed (as the latter, now, consist in part of non-natives) and thus the unemployment benefit, set by a democratic process, falls. We calculate the optimal levels of immigration, from the viewpoint of an observer who maximizes global welfare, according to an egalitarian and a utilitarian social welfare function. We compare these levels to the open-borders-equilibrium level. We find that the optimal level of immigration for the cosmopolitan egalitarian is significantly less than the open-borders equilibrium level, while the optimal level for a global utilitiarian is significantly greater than the open-borders level.     

Transformations of employment and occupation patterns in Taiwan's transition to an information society

This study investigates the employment and occupation patterns that have emerged as Taiwan has evolved into an information society. The study shows that the unemployment problem that arose after Taiwan's transformation to an information society is closely related to the inability of information-intensive industries (particularly information-intensive manufacturing) to absorb the labor released from labor-intensive industries. Second, the changing trends in occupation structure under the transformation to an information economy have made Taiwan's labor market unbalanced, benefiting workers who are more highly skilled in information, are more professional, and have higher levels of education. This state of unbalance negatively affects inequality and bias in the labor market.     

Self determination theory and employed job search

Self Determination Theory (SDT) predicts that employees who use controlled motivation to search for alternate (better) work are less successful than their counterparts who use autonomous motivation. Using Australian labour market data, we find strong support for SDT. We find that workers who face externally regulated pressures (pressure arising from involuntary part-time or casual labour contracts) to search for alternate employment are less likely to find better work, than workers who use autonomous motives to search for work. Our findings suggest that labour market policies trending towards ‘labour market flexibility/deregulation’ – which provide workers with controlled motives to search for work – will contribute to workers cycling through spells of insecure employment and possibly intermittent spells of unemployment with no realistic prospect of career development.     

Unemployment classifications and subjective well-being

Further research on the impact of unemployment on workers and their families requires greater refinement and more precise measurement of the concept. While previous studies have indicated the effects of unemployment on a wide range of variables, such as health and well-being, many of these studies suffer from imprecision by conceptualizing unemployment too narrowly and by using too strict a dichotomy between currently employed and currently unemployed workers. This research effort attempts to broaden and refine the concept of unemployment by defining it in terms of two job dimensions: current employment status and previous job loss. Using this conceptualization, the authors find that current unemployment after other job losses may have more devastating effects on well-being than losing one's job for the first time. Similarly, among the currently employed, those who have lost jobs in the past may experience more emotional difficulties than those who have never lost their jobs.     

Sexual Orientation,Unemployment and Participation: Are Gays Less Employable than Straights?

This paper is the first attempt to assess, in a unified econometric framework, the existence and the magnitude of both the sexual orientation participation gap and the sexual orientation unemployment gap. Having identified male same-sex couples using the Employment Survey, we use a bivariate probit selection model where the labor supply and the employment equation are jointly estimated for the French labor market. The results show that both participation and employment probabilities are significantly lower for gay employees compared to their heterosexual counterparts. Further investigations indicate that young gay workers, particularly, are more exposed to the unemployment risk than older ones. The beginning of a professional career and the subsequent entry to the labor market appear to be difficult steps to overcome for gay workers who spend more time than their heterosexual counterparts to find the good job.     

Self-Employment or Government Work? Blacks’ and Whites’ Responses to Long-Term Joblessness during the Great Depression

Investigations of survivalist entrepreneurship often fail to adequately examine displaced workers who suffer exceptionally long unemployment spells. The present study addresses this oversight by analyzing Census data on large northern cities during the Great Depression, exploring how unemployment duration is related to two presumably competing responses to joblessness: self-employment and government relief work. The analysis shows that among persons looking for work two years or more, blacks’ unemployment is positively associated with the odds of self-employment, whereas whites’ unemployment is positively associated with the odds of public emergency work. These findings accord with the theory that when resource-disadvantaged minorities face extraordinary labor market obstacles, they are more likely to become survivalist entrepreneurs than are majority-group members, who have a wider variety of options in the mainstream economy. Yet the results also imply that survivalist entrepreneurship was a viable option for only a small number of displaced black workers.     

Slipping Into and Out of Underemployment: Another Disadvantage for Nonmetropolitan Workers?1

Abstract Underemployment, which goes beyond unemployment to include the working poor, discouraged workers, and involuntary part-time workers, is a useful measure of employment hardship. We argue that underemployment should be included with other conventional indicators of the disadvantaged circumstances of nonmetropolitan (nonmetro) labor, in terms not only of prevalence, but also of the likelihood of transitions into and out of underemployment. We take advantage of the quasi-longitudinal nature of the U.S. Current Population Surveys to estimate models of year-to-year employment transitions for the quarter century 1968 to 1993. We find that (1) adequately employed nonmetro workers are more likely than their more urban counterparts to become underemployed; (2) the nonmetro underemployed are less likely to become adequately employed; (3) statistical controls only strengthen these nonmetro disadvantages; (4) the employment transitions of nonmetro workers are less affected by shifts in the direction of the national economy than are those of metro workers; and (5) nonmetro women are more disadvantaged than women residing elsewhere.     

STEM Education and STEM Work: Nativity Inequalities in Occupations and Earnings

The recruitment of skilled workers with expertise in science, technology, engineering and mathematics (STEM) is a core component of North American immigration policies. However, few studies examine the labour market integration of immigrant STEM educated workers. Multivariate analysis of the 2011 National Household Survey show that STEM educated immigrants who arrive as adults are less likely than the Canadian born to have STEM jobs and they earn less than their Canadian born counterparts. These patterns partly reflect their socio‐demographic characteristics, particularly their lower language proficiencies (measured as a combination of mother tongue and languages spoken at home) and the receipt of their degrees in institutions outside of Canada. These immigrant workers arrived primarily in the skilled worker programme that did not require pre‐arranged employment. Policy changes in recruitment and their implications for future STEM immigrant workers are discussed in the conclusion.     

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.     

Cross-country disparities in skill premium and skill acquisition

Skilled individuals are rewarded more in poor than in rich countries. Why aren't more individuals acquiring skills in poor countries? We document that the unemployment rate of the skilled net of that of the unskilled decreases with a country's level of development. Using a matching model of occupational choice and skill acquisition, we quantify the role of barriers to enter entrepreneurship for these unemployment rates, skill premium and acquisition. The cross-country correlation between skill premium and acquisition decreases by 45% when each country's gap to the US in the entrepreneurship barrier is decreased enough to even the unemployment differential.     

COMPENSATING WAGE DIFFERENTIALS FOR MANDATORY OVERTIME?

This paper examines the extent to which individuals who are employed by firms that require mandatory overtime receive a compensating wage differential for this "distasteful" working condition. While the empirical results indicate that the average worker does not receive a positive differential for this working condition, the results do indicate that unionized workers and (perhaps) newly hired workers receive a positive differential. The paper then develops a framework to determine if any observed compensating differential is, in fact, fully compensating. The application of this framework to the mandatory overtime issue reveals that the fully compensating differential would be relatively small. The methodology developed in this paper should prove useful in a variety of other contexts.     

SKILLED‐UNSKILLED WAGE INEQUALITY AND URBAN UNEMPLOYMENT

The impact of trade liberalization on the labor market in the North has drawn tremendous attention in the face of the growing skilled‐unskilled wage gap but in the South it has been somewhat neglected. One of the key structural differences between the North and the South is that the South experiences a pronounced rural‐urban migration in the presence of urban unemployment. We introduce this feature in the structure of a simple general equilibrium model to analyze the effects of trade liberalization and fragmentation on employment and the skilled‐unskilled wage differential in the South. In particular, we show that while fragmentation necessarily improves the unskilled wage and the skilled wage, more lucrative global opportunities for the skilled final product, in the absence of fragmentation, can reduce the rural wage and increase urban unemployment. The effect of fragmentation, ceteris paribus, on the skilled‐unskilled wage gap is sensitive to the degree of substitutability between land and unskilled labor. As such, fragmentation can magnify the increase in the skilled‐unskilled wage gap resulting from an improvement in the terms of trade. It is also shown that a technological progress in the intermediate goods sector increases the skilled‐unskilled wage gap and raises urban unemployment. (JEL F1, O1, F11, F12)     

The effect of education on unemployment duration

Exploiting the variation in education induced by a reform that compelled individuals to obtain additional schooling in Turkey, and using administrative unemployment insurance (UI) records, we show that high-educated unemployed workers, compared to their low-educated counterparts, use unemployment benefits longer, and they are less likely to find employment before their benefit periods expire. This suggests education increases one's selectiveness over jobs. We also show benefit generosity impacts the high- versus low-educated differentially. Extended benefits increase low-educated workers' probability of finding employment more than the high-educated. Our findings highlight the importance of considering worker attributes when designing the UI system.     

EFFICIENCY WAGE MODELS OF UNEMPLOYMENT: A SECOND VIEW

Efficiency wage models, in which firms find it profitable to pay wages above workers' reservation wages, provide a promising explanation for unemployment and interindustry wage differentials. One criticism of such models is they imply firms should sell jobs by requiring up-front bonds from new workers. However, only some efficiency wage models imply this. Moreover, firms might not require bonds for many reasons. We show that moral hazard and adverse selection models together explain many labor market phenomena. The efficiency wage model conforms well to empirical finding, but certain anomalies suggest the need to consider rent-sharing models.     

The minimum wage can harm workers by reducing unemployment

Economists may disagree over how much raising the minimum wage increases unemployment, though few argue that the unemployment effect is zero. According to the standard model, the less the unemployment caused by a minimum wage increase, the less the harm (or greater the good) that results. But by recognizing that minimum wage workers receive fringe benefits, I show that increasing the minimum wage may not cause any unemployment and harms workers because it doesn 't. Furthermore, when there is lumpiness in providing fringe benefits, a minimum wage increase may harm workers by