This chapter analyzes the distinct adjustment paths of U.S. labor markets (places) and U.S. workers (people) to increased Chinese import competition during the 2000s. Using comprehensive register data for 2000-2019, we document that employment levels more than fully rebound in trade-exposed places after 2010, while employment-to population ratios remain depressed and manufacturing employment further atrophies. The adjustment of places to trade shocks is generational: affected areas recover primarily by adding workers to non-manufacturing who were below working age when the shock occurred. Entrants are disproportionately native-born Hispanics, foreign-born immigrants, women, and the college-educated, who find employment in relatively low-wage service industries in healthcare, education, retail, and hospitality. Using the panel structure of the employer-employee data, we decompose changes in the employment composition of places into trade-induced shifts in the gross flows of people across sectors, locations, and non-employment status. Contrary to standard models, trade shocks reduce geographic mobility, with both in- and out-migration remaining depressed through 2019. The employment recovery stems almost entirely from young adults and foreign-born immigrants taking their first U.S. jobs in affected areas, with minimal contributions from cross-sector transitions of former manufacturing workers. Although worker inflows into non-manufacturing more than fully offset manufacturing employment losses in trade-exposed locations after 2010, incumbent workers neither fully recover earnings losses nor predominantly exit the labor market, but rather age in place as communities undergo rapid demographic and industrial transitions.

This chapter reviews the theory of monopsonistic wage setting, its empirical implications, and some puzzles the framework has struggled to explain. We begin by examining the fundamentals of monopsonistic wage determination. The core of the theory is a mapping from the distribution of worker outside options to wages. We study non-parametric shape restrictions that ensure this mapping is unique. Building on these results, we introduce a menu of tractable parametrizations of labor supply to the firm, some of which are shown to emerge naturally from equilibrium search models. Next, we review why wage markdowns do not necessarily signal inefficiency and discuss some criteria for assessing misallocation in a monopsony model with search frictions. Turning to the model’s empirical implications, we examine how the magnitude of productivity-wage passthrough depends on the super-elasticity of labor supply to the firm and establish that compensating differentials for firm amenities depend on the curvature of the outside option distribution. We show that firm-specific shifts in either productivity or amenities can be used as instruments to identify labor supply elasticities and review strategies for estimating non-constant elasticities. We then consider extensions of the basic model involving third-degree wage discrimination and examine their ability to rationalize patterns of worker-firm sorting. Monopsony models traditionally assume that firms commit to posted wages. Relaxing this assumption, we develop a connection between the first-order conditions of the monopsony model and models of bargaining with incomplete information. These models explain why bilateral inefficiencies may persist in the presence of negotiation, yield predictions about the response of within-firm wage dispersion to productivity shocks, and suggest reasons why some productivity shifters may not constitute excludable instruments. Next, we endogenize productivity by allowing for efficiency wages, non-constant returns to scale, and price-cost markups. Empirical monopsony estimates often suggest that firms enjoy implausibly large profit margins. We argue that allowing for non-constant labor supply elasticities and firm adjustment costs can potentially resolve this difficulty. Finally, we review why the strong passthrough of minimum wages to product prices presents a challenging puzzle for standard monopsony models and discuss potential reconciliations to this puzzle involving firm heterogeneity, quality upgrading, and lumpy price adjustment.

This chapter reviews recent advances in the task model and shows how this framework can be put to work to understand trends in the labor market in recent decades. Production in each industry requires the completion of various tasks that can be assigned to workers with different skills or to capital. Factors of production have well-defined comparative advantage across tasks, which governs substitution patterns. Technological change can: (1) augment a specific labor type—e.g., increase the productivity of labor in tasks it is already performing; (2) augment capital; (3) automate work by enabling capital to perform tasks previously allocated to labor; (4) create new tasks. The task model clarifies that these different technologies have distinct effects on labor demand, factor shares, and productivity and their full impact depends on the substitution patterns between workers that arise endogenously in the task framework. We explore the implications of the task framework using reduced-form evidence, highlighting the central role of automation and new tasks in recent labor market trends. We also explain how the general equilibrium effects ignored in these reduced-form approaches can be estimated structurally.

The empirical migration literature often identifies the labor market effects of immigration using exogenous variation in migration concentration across sectors or regions. However, this approach differences out macroeconomic effects which occur in all sectors. In this paper we apply macroeconomic time series methods to UK data from 2001-2019 for 35 different sectors, to model, for the first time, immigration, native wages and hours worked, as responding to demand, supply and immigration shocks at both aggregate and sectoral levels. The labor market is thereby modeled as being subject to multiple shocks at any one time. Using a VAR approach, we find that the share of migrant labor is `Granger caused' by other labor market variables which suggests that immigration is, in part, endogenously determined by aggregate demand and supply. However, it also retains a component which has a negative association between immigration and native wages, which may be thought of as a `migration shock'. Using historical decompositions which decompose both the error terms and, novelly, the constant terms into their structural parts, we show that the `migration shock' accounts for most of the change in migration share over the sample period and plays a significant negative role in the determination of native wage growth, particularly in unskilled sectors. However other contemporaneous shocks have offsetting positive associations between immigration and native wages, whose effects differ substantially across sectors.

We study the impact of online instruction with a field experiment that randomly assigns 1,344 university students to different proportions of online and in-person lectures in multiple introductory courses. Increased online instruction leaves men’s exam performance unaffected but significantly lowers women’s performance, particularly in math-intensive courses. Online instruction also reduces women’s longer-run performance and increases their study dropout. Exploring mechanisms, we find that women exposed to more online lectures report greater difficulty in connecting with peers, less engaging instructors, and lower course satisfaction. Our findings suggest that shifting toward more online instruction may disproportionally harm women.

This paper documents how the local labor market (LLM) responds to a change in touristic attractiveness. Leveraging largely underutilized data from several sources, we exploit a unique classification of Italian localities based on their main touristic assets and aggregate trends in foreign tourists' choices in a shift-share research design. Looking at all LLMs, we find a positive relationship between changes in attractiveness and changes in the local tourism-related economic activity, with a positive impact on tourism expenditure and tourism employment, but no effect on total employment. In high-unemployment LLMs, however, we find evidence of sizable total employment effects and indirect effects generated through industries related to tourism and firms in the nontradable sector and the manufacturing sector.

Managers (“bosses”) are central to the development and allocation of human capital in firms because they train employees and learn about their abilities. While a multi-divisional firm wants to allocate workers to wherever they are most productive, bosses who are rewarded for their units’ performance prefer to hold on to good employees, and the prospect of losing good people weakens the incentives to train them. We derive the optimal incentive contract for bosses that enables a firm to change from “silos” with only upward mobility to a “lattice” with cross-divisional mobility. Compared to silos, a lattice achieves a more efficient allocation of people to positions, but also entails agency costs that may exceed the benefits. We suggest empirical predictions about when silos or a lattice are optimal, and relate our model and its results to examples and evidence.

We measure value-based leadership (VBL) – the strength of personal values and to what extent they penetrate firms’ organization – in a survey of 1,500 Danish CEOs. First, VBL is more common in family firms and women CEOs. It is not correlated with the CEO’s IQ or management practices. Second, VBL correlates with firm performance; CEO turnover and hospitalizations establish the causality of this link. Third, firm policies are different: (i) during the pandemic, VBL firms have lower employee turnover; (ii) in normal times, they have flatter organizational structures. Fourth, factor analysis confirms robustness of the findings. Other factors derived from a deep survey on CEO characteristics and opinions do very little to explain firm outcomes. We conclude that value-based leadership contributes in explaining the value added of CEOs for firms.

Official government estimates show a gradual decline in union density in Japan over several decades akin to that in other countries with decentralized bargaining structures. However, new evidence from various social surveys indicates that union density has been rising in Japan. Using one of these social surveys – the Survey on the Work and Life of Workers (SWLW) – we show union density has risen by 7.3 percentage points to 29.1% in the Japanese private sector between 2011/13 and 2020/24. We decompose the growth in union density since 2011/13 to establish how much of it is attributable to changes in workforce composition. Conditioning on union presence at the workplace, compositional change accounts for 47% of the increase in union density. The remaining 53% is due to within-group change with unions increasing membership across all types of worker including some with traditionally low rates of unionization. However, establishing a union at the workplace remains key since virtually all the growth in union membership (97%) is in unionized workplaces.

What sparked humanity’s leap from stagnation to prosperity? What lies at the core of inequality among nations? Unified Growth Theory explores the evolution of societies over the entire course of human history. It uncovers the universal wheels of change that have governed the journey of humanity, driven the growth process, and shaped inequality across the globe. The theory sheds light on two of the most fundamental mysteries surrounding this journey: (i) The Mystery of Growth—the origins of the dramatic transformation in human prosperity over the past two centuries, in the wake of millennia of near stagnation; and (ii) The Mystery of Inequality—the roots of the vast inequality in the wealth of nations. The theory suggests that forces operating in the distant past are central to the understanding of the uneven development across the globe and the design of effective policies that could promote economic growth and mitigate inequality.

Online food delivery platforms typically operate through a controversial business model that relies on subcontracting self-employed workers, known as riders. Using a search and matching model, we quantify the labor-market effects of the Spanish Riders’ Law in 2021 that establishes the presumption of dependent employment for riders. Riders with heterogeneous preferences for leisure trade off work flexibility and easier employability as self-employed against enjoying higher wages as employees. Our main finding is that the reform succeeded in increasing the share of employees but failed to fully absorb the large outflows from self-employment and decreased riders’ wages, resulting in welfare losses. However, complementing the reform with a payroll tax cut for platforms hiring employees preserves employment levels and increases substantially riders’ welfare.

US drone strikes are popular with the electorate and overseen by the President. This paper investigates whether the US President uses drone strikes strategically for political gain. We document that US drone strikes in Afghanistan, Pakistan, Somalia, and Yemen are significantly more likely before US elections, when popularity has high payoffs. We find no changes for unpopular, piloted airstrikes. Consistent with unusually high drone approvals, abnormally cloudy skies before US elections lead to a postponement or redirection of strikes to other target countries. To examine whether drone strikes are used strategically to divert attention from damaging media coverage, we gather closed captions from all cable TV coverage of the President and analyze their tone using natural language processing. Drone strikes are more likely in weeks when news anchors cover the President more negatively, a relation that holds both during and outside of election periods. We find no such relationship for piloted airstrikes or during weeks of high news pressure.

How can crime be disrupted effectively without increasing resources? To answer this question, we develop a spatial network model of crime diffusion, using London as a case study. Moving beyond traditional hot spot policing, we identify key player neighborhoods-highly connected areas in the network. Counterfactual analysis shows that targeting top 10% of key players reduces crime by 10.7% (5.8 percentage points) more than targeting top 10% of hot spots, resulting in potential annual savings exceeding 130 million pounds. Examining the underlying mechanisms, we find that while hot spots attract crime locally, key players facilitate its propagation across areas.

This paper presents direct evidence on how firms' innovation is affected by access to knowledgeable labor through co-worker network connections. We use a unique dataset that matches patent data to administrative employer-employee records from "Third Italy"-- a region with many successful industrial clusters. Establishment closures displacing inventors generate supply shocks of knowledgeable labor to firms that employ the inventors' previous co-workers. We estimate event-study models where the treatment is the displacement of a "connected" inventor (i.e., a previous coworker of a current employee of the focal firm). We show that the displacement of a connected inventor significantly increases the hiring of connected inventors. Moreover, the improved access to knowledgeable workers raises firms' innovative activity. We provide evidence supporting the main hypothesized channel of knowledge transfer through firm-to-firm labor mobility by estimating IV specifications where we use the displacement of a connected inventor as an instrument to hire a connected inventor. Overall, estimates indicate that firms exploit displacements to recruit connected inventors, and the improved capacity to employ knowledgeable labor within the network increases innovation.

Does gender identity affect judicial decisions? This paper provides novel evidence of in-group gender bias in the judicial decisions for almost all divorce cases in China. Exploiting the effectively random assignment of cases to judges, the analysis finds that female judges are 1.2 percentage points more likely to grant divorce petitions filed by female plaintiffs compared to male plaintiffs, relative to male judges. This bias primarily reflects female judges’ harsher treatment of male plaintiffs. The bias is significantly weaker in regions with stronger traditional gender norms, indicating that conservative cultural attitudes may constrain overt displays of in-group gender favoritism. Institutional legal development has little moderating effect, underscoring the primary role of culture. These findings highlight the importance of complementing efforts to promote judicial diversity with safeguards to detect and mitigate implicit bias.

This chapter offers a novel approach to analyzing the effects of immigration on labor markets by structuring the discussion around a conceptual framework that links empirical estimates to fundamental structural parameters. This framework facilitates a clear interpretation and comparison of the parameters estimated by different empirical methods and clarifies the specific questions each method addresses. Section II introduces the canonical labor market model as a foundation for categorizing empirical approaches. Section III details the empirical approaches. Section IV differentiates between immigration’s impacts on regions and workers, proposing a framework to connect these perspectives. Recognizing the limitations of the basic canonical model, Section V explores extensions that incorporate critical adjustment mechanisms to immigration shocks, such as endogenous technology adoption, innovation, and product price adjustments. Section VI broadens the analysis by examining monopsonistic labor markets and search frictions, moving beyond the assumption of perfect competition. Finally, Section VII concludes with a discussion of unexplored research questions that are pivotal for advancing the understanding of immigration’s labor market effects and shaping future research agendas.

This chapter surveys recent advances in personnel economics. We discuss new research on incentives and compensation; hiring practices; the influence of managers and peers; and time use, technology, and training. Two main themes emerge from this survey. First, we illustrate the interplay between these topics and productivity differences between people and work units. We discuss evidence showing substantial and persistent productivity variation among workers in the same roles, and we examine the extent to which personnel economics research can explain this variation. Second, personnel economics has benefited from exploration – the willingness to use new data and methods to shed light on existing questions and raise new ones. Since the last handbook chapter, personnel economics has evolved from focusing primarily on compensation and incentives to embracing a broader research agenda that examines various HR practices and their impact on worker and firm outcomes. As many personnel studies use data from individual firms, we discuss external validity and provide concrete guidance on improving discussions of generalizability from specific contexts.

This paper synthesizes the economics literature on skills and human capital, with a particular focus on higher-order capacities like social and decision-making skills. We review the empirical evidence on returns to human capital from both a micro and macro perspective, as well as the evidence on returns to human capital investment over the life-cycle. We highlight two key limitations of human capital theory as currently implemented. First, prior work mostly assumes that human capital is one-dimensional and can be measured by education or test scores alone. Second, human capital is typically modeled as augmenting the marginal product of labor with workers being treated as factors of production, just like physical capital. We argue for a new approach that treats workers as agents who decide how to allocate their labor over job tasks. Traditional cognitive skills make workers more productive in any task, while higher-order skills govern workers’ choices of which tasks to perform and whether to work alone or in a team. We illustrate the value of this approach with stylized models that incorporate teamwork and decision-making skills and generate predictions about how returns to skills vary across contexts.

We show that the widespread approach to estimate the career costs of motherhood – so-called “child penalties” – is prone to produce biased results, as it pools first-time mothers of all ages without accounting for their differences in characteristics and outcomes. We propose a novel method building on the recent advances in the difference-in-differences literature to address this issue. Applied to German administrative data, our method yields 30 percent larger post-birth earnings losses than the conventional approach. We document meaningful effect heterogeneity by maternal age in both magnitude and interpretation, highlighting its key role in understanding the impact of motherhood.

Using rich data on personnel records, work assignments, and performance in a financial institution, we uncover the mechanisms leading to promotion gaps in knowledge teamwork. We find a substantial promotion gap for women in early career stages. Analyzing over 10,000 investment projects reveals that assignments to project team leaderships (a “promotable” task) are crucial in explaining the gaps in promotions and affect long-term careers. We find causal evidence that male supervisors favor male bankers, while women benefit from female supervisors. A survey among employees indicates that women perceive to be disadvantaged in the assignments of tasks, but they do not differ in aspirations and demand for these roles. When a new CEO entered the firm, much of the gap disappears.

We examine whether gig jobs in online food delivery (OFD) are a stepping stone for refugees entering the Austrian labor market. Our identification strategy combines the quasi-random assignment of refugees to Austrian regions with the expansion of gig firms across the country. The local availability of OFD jobs at the time of access to the labor market initially accelerates job finding among refugees. Subsequently, however, gig workers remain in low-paid, unstable jobs with low career prospects, while the employment rate of refugees without gig opportunities catches up. The local availability of gig jobs negatively affects human capital investments and job search behavior, even among refugees outside the gig economy.

We examine the relationship between economic development and female labor force participation, with a focus on the impact of gender norms. Analyzing quasi-random variation in provincial exports in reunified Vietnam from 2002 to 2018, we find that a positive economic shock led to a significant decline in women’s labor market engagement, particularly among married women from wealthier households and those with husbands in more skilled occupations. This trend is more pronounced in the South (formerly capitalist) than in the North (always socialist), and among native Southerners compared to Northerners relocated to the South after the war. Our findings highlight the importance of gender role attitudes in shaping women’s responses to rising incomes.

The job finding rate declines with the duration of unemployment, but the relative importance of workers’ search behavior and employers’ recruitment behavior remains unclear. We use monthly search diaries from Swiss public employment offices to shed new light on this issue. Search diaries record each single application sent by a job seeker and indicate whether the employer followed up with an interview and a job offer. Based on more than 600,000 applications sent by 15,000 job seekers, we find that applications and interviews decrease, but job offers per interview increase with duration. A theoretical framework with endogenous search effort by workers and statistical discrimination by firms replicates the duration patterns of applications, interviews and job offers closely. The estimated model predicts that roughly half of the decline in the job finding rate is due to structural duration dependence and the other half to dynamic selection of the unemployment pool. Falling applications by job seekers – who internalize statistical discrimination by firms – are the main driver of duration dependence.

How do firms adjust their labor demand when a female employee takes temporary leave after childbirth? Using Austrian administrative data, we compare firms with and without a birth event and exploit policy reforms that significantly altered leave durations. We find that (i) firms adjust hiring, employment, and wages around leave periods, but these effects fade quickly; (ii) adjustments differ sharply by gender, reflecting strong gender segregation within firms; (iii) longer leave entitlements extend actual leave absences but have only short-term effects; and (iv) there is no impact on firm closure up to five years after birth.

This paper examines how China’s growing research capabilities impact global research universities across scientific fields. Using bibliometric data from 1980 to 2020, we assess the effects of the “China shock” on high-impact publications, novel concepts, and citation patterns. Our analysis reveals a positive net effect in Chemistry and Engineering & Materials Science (EMS), but a negative effect in Clinical & Life Sciences (CLS). In other fields, the effects are mostly positive but imprecise. We highlight the coexistence of competition and spillover effects, with their relative strength shaped by field characteristics, such as expansion potential and the quality of China’s research.

We evaluate a labor market integration program that fast-tracked asylum seekers into the Italian labor market through personalized job mentoring, placement assistance, and on-the-job training. Leveraging randomized assignment across reception centers and individual-level administrative records, we find effects on employment rates of 10 percentage points, or 30% over the baseline, over a 18-month period. The program also improved job quality through increased access to fixed-term and open-ended contracts. Subsidized internships were a critical pathway to transitioning participants into standard employment. Survey data indicate that these effects reflect a net increase in employment, rather than a shift from informal to formal jobs. We also document broader benefits on socioeconomic integration, including language proficiency and social networks with native Italians.

We analyze explicit age discrimination in hiring decisions and job seekers’ responses in the Chinese labor market, using a large-scale dataset of job postings with ad-level group characteristics of applicants. In nearly 48% of postings, employers explicitly exclude certain age groups, with significant variation across firm types, sizes, industries, and occupations. We show that employers’ explicit age requests are shaped by statistical and taste-based discrimination reflected in job skill requirements and ageist language, as well as constraints such as expected processing costs, and competition in labor demand. Our findings align with a labor demand model where employers decide whether to consider (undesired) candidates from an additional age group based on their search factors and preferences. On the supply side, we leverage the distribution of applicant characteristics such as age and education level to show that age requirements are interpreted as signals rather than strict barriers. Nonetheless, explicit age restrictions substantially alter the applicant pool by attracting younger applicants while discouraging skilled workers.

The gender wage gap rises with experience. To what extent do firm policies mediate this rise? We use administrative data from Italy to identify workers’ first jobs and compute wage growth over the next 5 years. We then decompose the contribution of first employers to the rise in the gender wage gap, taking account of maternity events affecting a third of female entrants. We find that idiosyncratic firm effects explain 20% of the variation in early career wage growth, and that the sorting of women to slower-growth firms accounts for a fifth of the gender growth gap. Women who have a child within 5 years of entering work have particularly slow wage growth, reflecting a maternity effect that is magnified by the excess sorting of mothers-to-be to slower-growth firms. Many entrants change jobs within their first 5 years and we find that the male-female difference in early career wage growth arises from gaps for both movers and stayers. The firm components in wage growth for stayers and movers are highly correlated, and contribute similar sorting penalties for women who stay or leave.

This study examines the impact of increasing the Minimum Legal Drinking Age (from 16 to 18 years old) on the academic performance, substance use, and peer behaviours of teenagers. Using a difference-in-discontinuities design, we exploit regional MLDA reforms in Spain and PISA data to identify significant improvements in mathematics and science performance, particularly among male teenagers and those from lower socioeconomic backgrounds. A complementary analysis using data from the Survey on Drug Use in Secondary Education in Spain indicates that these academic gains coincide with reductions in alcohol consumption, intoxication, smoking, and marijuana use, suggesting a link between substance use and educational outcomes. Moreover, the reform led to less drinking and less use of illicit drugs within peer networks, highlighting the amplifying role of peer effects in policy impact.

Freedom of speech is central to democracy, but protests that amplify extremist views expose a critical trade-off between civil liberties and public safety. This paper investigates how right-wing demonstrations affect the incidence of hate crimes, focusing on Germany’s largest far-right movement since World War II. Leveraging a difference-in-differences framework with instrumental variable and event-study approaches, we find that a 20% increase in local protest attendance nearly doubles hate crime occurrences. We explore three potential mechanisms—signaling, agitation, and coordination—by examining protest dynamics, spatial diffusion, media influence, counter-mobilization, and crime characteristics. Our analysis reveals that large protests primarily act as signals of broad xenophobic support, legitimizing extremist violence. This signaling effect propagates through right-wing social media networks and is intensified by local newspaper coverage and Twitter discussions. Consequently, large protests shift local equilibria, resulting in sustained higher levels of violence primarily perpetrated by repeat offenders. Notably, these protests trigger resistance predominantly online, rather than physical counter-protests. 

This paper investigates the evolution of ethnic wage gaps among men and women in the UK over the period 1993– 2023. The results show reductions in wage gaps among all South Asian groups, which are driven by higher educational attainment and occupational advancement. In contrast, wage gaps persist for Black ethnic groups. While for Black Caribbeans a key issue is lower levels education, for Black Africans the high proportion of foreign-born individuals limits their returns on education. These trends suggest a reordering of the wage gap hierarchy over time, with Black groups expected to experience the largest disparities in the future, instead of the historically disadvantaged Pakistani and Bangladeshi groups.

We study how connections to German federal parliamentarians affect firm dynamics by constructing a novel dataset linking politicians and election candidates to the universe of firms. To identify the causal effect of access to political power, we exploit (i) new appointments to the company leadership team and (ii) discontinuities around the marginal seat of party election lists. Our results reveal that connections lead to reductions in firm exits, gradual increases in employment growth without improvements in productivity. Adding information on credit ratings, subsidies and procurement contracts allows us to distinguish between mechanisms driving the effects over the politician’s career.

Debates about immigration’s role in addressing population aging typically concentrate on immigrant fertility rates. Moreover, standard projections account for migration’s impact on overall population growth while largely overlooking how immigration might affect native fertility. In contrast, we show that forced immigration influences native fertility as well. We investigate this relationship by examining the influx of refugees into Türkiye following the onset of the Syrian civil war in 2011. Using two complementary instrumental variable strategies, we find robust evidence that native fertility increases in response to forced migration. This result holds across three distinct datasets and is further supported by a corresponding rise in subjective fertility measures, such as the ideal number of children. Additionally, we explore four potential mechanisms and document significant heterogeneity in fertility responses among different native subgroups. Our findings suggest that factors related to the labor market and norm transmission may help explain the observed increase in native fertility.

Industrial policies are widespread, but evidence on their workforce effects remains limited. We present novel evidence on the impact of EU technology subsidies on employment and skill demand in Finnish SMEs, 1994–2018. The subsidies fund new machinery, including robots and CNC machines. Comparing closely matched grant winners and losers, we find that receiving a grant increased employment without changing skill composition. Leveraging application text data and machine learning, we match firms, analyze their plans, and show that subsidies primarily supported expansion, such as launching new products, rather than automating work. In contrast, analysis of a broader sample of manufacturing firms outside the program reveals that IT investments are more strongly associated with skill upgrading than machinery investments, suggesting that different technologies may impact jobs differently. Our findings indicate that machinery grants can create opportunities for non-college-educated workers.

Using a specially constructed international dataset of adult heights, we assess the extent, drivers and consequences of migrant selectivity, measured as relative height. This offers a measure of health selectivity that precedes emigration and is stable over time. Applying this measure to representative data from the German Socio-Economic Panel, we (i) evaluate whether it correlates with characteristics theoretically associated with migrant health selectivity, (ii) test the assumption that selectivity accounts for the commonly observed immigrant health advantage, and (iii) assess whether degree of selectivity sheds light on the paradox that immigrants’ health deteriorates over time since arrival. We find that while, on average, immigrants are positively selected on health and have better health on average than non-migrant Germans, greater selectivity is not associated with better health. However, more positively selected immigrants experience less deterioration in their health, whether evaluated cross-sectionally across arrival cohorts or longitudinally within individuals, helping to explain the immigrant health paradox. Overall, our results i) confirm that migrants are selected on health, ii) support theoretical expectations relating to migrant selection that higher barriers to migration increase selectivity, and iii) demonstrate that while most immigrants are healthier upon arrival, only more selected immigrants enjoy better health throughout adulthood.

Spatial unit roots can lead to spurious regression results. We present a brief overview of the methods developed in Müller and Watson (2024) to test for and correct for spatial unit roots. We also introduce a suite of Stata commands (-spur-) implementing these techniques. Our commands exactly replicate results in Müller and Watson (2024) using the same Chetty et al. (2014) data. We present a brief practitioner’s guide for applied researchers.

Elite economics PhD programs aim to train graduate students for a lifetime of academic research. This paper asks how advising affects graduate students’ post-PhD research productivity. Advising is highly concentrated: at the eight highly-selective schools in our study, a minority of advisors do most of the advising work. We quantify advisor attributes such as an advisor’s own research output and aspects of the advising relationship like coauthoring and research field affinity that might contribute to student research success. Students advised by research-active, prolific advisors tend to publish more, while coauthoring has no effect. Student-advisor research affinity also predicts student success. But a school-level aggregate production function provides much weaker evidence of causal effects, suggesting that successful advisors attract students likely to succeed–without necessarily boosting their students’ chances of success. Evidence for causal effects is strongest for a measure of advisors’ own research output. Aggregate student research output appears to scale linearly with graduate student enrollment, with no evidence of negative class-size effects. An analysis of gender differences in research output shows male and female graduate students to be equally productive in the first few years post-PhD, but female productivity peaks sooner than male productivity.

Immigration may affect income inequality not only by changing factor prices but also by inducing policy makers to adjust the prevailing income tax system. We assess the relative importance of these economic and political channels using administrative data from Switzerland where local authorities have a high degree of tax autonomy. We show that immigrant inflows not only raise gross earnings inequality but also reduce the progressivity of local income taxes, further increasing after-tax inequality. Our estimates suggest that 10 percent of the impact of immigration on the net interquartile and interdecile earnings gaps can be attributed to the political channel.

Can providing information to potential migrants influence their decisions about risky and irregular migration? We conduct an experiment with over 7,000 secondary school students in Guinea, providing information through video testimonials by migrants who settled in Europe and through aggregate statistics. We implement three treatments: (i) information about the risks of the journey; (ii) information about economic outcomes in the destination country; and (iii) a combination of both. One month after the intervention, all treatments led students to update their beliefs about the risks and the economic outcomes of migration, resulting in decreased intentions to migrate. One year later, the Risk Treatment resulted in a 51% decline in migration outside Guinea. This effect was driven by a decrease in migration without a visa (i.e., potentially risky and irregular) and was more pronounced among poorer students. These findings are consistent with the predictions of a model where individuals choose between not migrating, migrating regularly, or migrating irregularly, and where information increases the perceived cost of irregular migration, thus decreasing migration among poorer students who cannot afford regular migration.

This chapter traces the evolution of the study of gender in the labor market, focusing on how academic thinking on this topic has evolved alongside real world developments in gender inequality from the 1980s to the present. We present a simple model of female labor supply to illustrate how various forces discussed in the literature (e.g., productivity differentials, unequal gender roles, wage markdowns) affect the gender earnings gap. A major development in the literature is a clearer distinction between intrinsic differences in preferences and skills between men and women versus differential constraints in driving gender gaps. We discuss insights from research on the relative importance of these explanations, and the implications for economic efficiency. We highlight that much of the literature today emphasizes the relevance of gendered constraints, where women and men typically face differential trade-offs between family and career, with implications for job sorting, job search, and earnings. These constraints have their roots in gender roles within the household that are shaped by wider societal norms. We review recent research that establishes the relevance of identity and norms for understanding gender inequalities in the labor market, both on the supply-side and on the demand-side, as well as what drives the formation and evolution of these norms. Finally, we conclude with suggestions for future research.

This article provides an overview of the economic literature on short-time work. It presents the main characteristics of short-time work since its emergence in Germany in the 1930s. It analyzes its effectiveness as a job preservation mechanism, drawing on theoretical models and empirical studies. It concludes by highlighting the areas that future research could explore to address the most significant gaps in our understanding of short-time work.

Labor economics often assumes that wages w are equal to the marginal revenue product of labor MRPL. However, recent literature has shown that firms’ market power allows them to pay wages substantially below marginal productivity.
The markdown (MRPL − w)/w is our preferred measure of firms’ monopsony power, and captures the percent wage increase that would occur if monopsony power were eliminated. We derive the markdown across three classes of models, each embodying a distinct source of monopsony power. First, in oligopsony models, monopsony power arises from strategic interactions between large firms, and is related to labor market concentration. Second, in job differentiation models, monopsony power arises from workers’ heterogeneous preferences over jobs that differ in wages and amenities. Finally, in search and matching models, it arises from frictions that prevent workers from accessing all existing job vacancies. To identify the markdown, empirical studies often rely on estimating the firm-level labor supply elasticity and taking its inverse as a measure of the markdown. A few studies directly estimate MRPL using a production function approach. Across studies, the markdown typically ranges between 15% and 50% implying that wages would increase by 15 to 50% if firms’ monopsony power were eliminated. Finally, we analyze the policy implications of monopsony power in three areas, drawing on both theory and empirical analysis: merger control in antitrust policy, the regulation of non-competition agreements, and minimum wages. Monopsony power helps explain how mergers and noncompetition agreements can lower wages, and how minimum wages can increase employment. Overall, the literature shows that monopsony power is significant, and should be considered when analyzing policy and the sources of wage variation.

This chapter synthesizes and critically reviews the modern instrumental variables (IV) literature that allows for unobserved heterogeneity in treatment effects (UHTE). We start by discussing why UHTE is often an essential aspect of IV applications in economics and we explain the conceptual challenges raised by allowing for it. Then we review and survey two general strategies for incorporating UHTE. The first strategy is to continue to use linear IV estimators designed for classical constant (homogeneous) treatment effect models, acknowledge their likely misspecification, and attempt to reverse engineer an attractive interpretation in the presence of UHTE. This strategy commonly leads to interpretations of linear IV that involve local average treatment effects (LATEs). We review the various ways in which the use and justification of LATE interpretations have expanded and contracted since their introduction in the early 1990s. The second strategy is to forward engineer new estimators that explicitly allow for UHTE. This strategy has its roots in the Gronau-Heckman selection model of the 1970s, ideas from which have been revitalized through marginal treatment effect (MTE) analysis. We discuss implementation of MTE methods and draw connections with related control function and bounding methods that are scattered throughout the econometric and causal inference literature.

This paper reviews the literature on firm wage differences and the fixed effects methods typically used to measure these differences. High wage firms tend to be more productive, larger, more sought after by workers, and to employ more credentialed and higher wage workers. The latest evidence suggests high wage firms also tend to offer better amenities and are prone to outsourcing and mass layoffs. Reviewing the requirements of the “AKM model” of Abowd, Kramarz, and Margolis (1999), I provide a graph theoretic interpretation of the restrictions this model places on the wage changes of workers who switch employers and examine the extent to which they are satisfied in a benchmark dataset. Assumptions are provided that give these wage changes a causal interpretation and I discuss some difficulties that arise in aggregating them into a global ranking of firm wage levels. In reviewing the econometrics of variance decompositions, I argue that attention ought to focus on effect sizes rather than variance shares, which can be difficult to compare across datasets with different noise levels. Cross-fitting and clustering methods for addressing limited mobility bias are reviewed. A series of bounding and imputation exercises suggest the network pruning typically used in conjunction with cross-fitting methods has little effect on estimands of interest. A review of the latest international evidence finds that the bias corrected standard deviation of firm effects tends to be substantially elevated in less developed countries. Variance estimation methods for second step regressions of firm effects on covariates are reviewed and illustrated with an empirical application to the firm size wage premium. Finally, I discuss connections between the AKM model and the celebrated sequential auction framework of Postel-Vinay and Robin (2002a), concluding with some areas for future work at this intersection.

One of the outcomes of the Brexit referendum result was that EU nationals were required to register on the EU Settlement Scheme (EUSS) if they wanted to remain in the UK after its departure from the EU. In order to be granted settled or pre-settled status, applications needed to have been submitted by 30th June 2021. However, applications continue to have been submitted and processed after this date because of late applications (with a reasonable explanation), transfers from pre-settled to settled status and family members wishing to join relatives in the UK. Published Home Office statistics provide only limited information on applications received since June 2021 separately for the countries in the UK, which is not that helpful for devolved governments. In this paper, we apply a simple method to calculate applications received after June 2021 from the four countries in the UK, focusing particularly on applications for several demographic subgroups from Wales. Our results show increases in applications from Romanian and Bulgarian nationals since June 2021 as well as rises in refused, withdrawn and invalid applications. We also find that a relatively high percentage of recent applications were made by people living in Newport since this local authority accounted for around 18% of the Welsh total after June 2021 compared to 11% before this.

While Western countries worry about labor shortages, their institutional barriers to skill transferability prevent immigrants from fully utilizing foreign qualifications. Combining administrative and survey data in a difference-in-differences design, we show that a German reform, which lifted these barriers for non-EU immigrants, led to a 15 percent increase in the share of immigrants with a recognized foreign qualification. Consequently, non-EU immigrants’ employment and wages in licensed occupations (e.g., doctors) increased respectively by 18.6 and 4 percent, narrowing the gaps with EU immigrants. Despite the inflow of non-EU immigrants in these occupations, we find no evidence of crowding out or downward wage pressure for natives.

The economics of crime has emerged as a critical field over the past 30 years, with economists increasingly exploring the causes and consequences of criminal behavior. This chapter surveys key contributions and developments from labor economists, who investigate the (often two-way) intersection of crime with labor market factors, such as education, wages, and unemployment. The chapter underscores the importance of understanding criminal decision-making in economic analysis through the lens of opportunity costs and labor market conditions. Methodological advancements, particularly those addressing causation, have propelled the field forward, enabling more accurate conclusions to be drawn for policy recommendations. The chapter also explores the role of social policies and international contexts, emphasizing the need for evidence-based reforms to effectively reduce crime. This comprehensive review underscores the transformative impact of economics on crime research and its potential to influence real-world policies.

This chapter surveys the literature on the impact of minimum wages on low-wage labor markets. We describe and critically review the empirical methods in the new minimum wage literature, particularly those leveraging quasi-experimental variation. We provide a quantitative overview of the most recent evidence on the employment and wage effects of the policy, while also exploring emerging research on its impact on other margins, including amenities, other inputs (such as capital and high-skilled workers), firm entry and exit, output prices and demand, profits, and productivity. This approach allows us to present a comprehensive picture of how minimum wage policies affect firms, workers, and labor markets. We also review the evidence on the policy’s impact on wage inequality and income distribution. Finally, we discuss how these effects can vary depending on the economic context and the level of a country’s development.

This chapter, prepared for the Handbook of Labor Economics, presents a comprehensive overview of how labor economists understand job search among the unemployed and how job search is shaped by unemployment insurance (UI) and active labor market policies (ALMP). It focuses on synthesizing key lessons from the empirical research of the last decade and presents recent novel theoretical developments.

Over the past two decades, there have been significant changes in family dynamics and labor market interactions, with shifts in fertility, marriage, divorce, cohabitation, family labor supply, gender inequality, and childrearing. This chapter examines the impact of government policies on these trends, highlighting the latest research across different OECD countries. The best evidence comes from administrative data and modern econometric methods. The chapter concludes with a summary of lessons learned and directions for future research

Labor economists increasingly work in empirical contexts with large numbers of unit-specific parameters. These settings include a growing number of value-added studies measuring causal effects of individual units like firms, managers, neighborhoods, teachers, schools, doctors, hospitals, police officers, and judges. Empirical Bayes (EB) methods provide a powerful toolkit for value-added analysis. The EB approach leverages distributional information from the full population of units to refine predictions of value-added for each individual, leading to improved estimators and decision rules. This chapter offers an overview of EB methods in labor economics, focusing on properties that make EB useful for value-added studies and practical guidance for EB implementation. Applications to school value-added in Boston and employer-level discrimination in the US labor market illustrate the EB toolkit in action.

This paper studies how aggregate labor market conditions affect the intragenerational assimilation of immigrants in the hosting country. Using data from the American Community Survey, we leverage variation in the forecast errors for national and local unemployment rates in the US at the time of arrival of different cohorts of immigrants to identify short- and long-run effects of recessions on their careers. We document that immigrants who enter the US when the labor market is slack face large and persistent earnings reductions: a 1 p.p. rise in the unemployment rate at the time of migration reduces annual earnings by 3.9 percent on impact and 1.4 percent after 12 years since migration, relative to the average US native. This effect is not homogeneous across migrants: males without a college education from low-income countries are the only ones who suffer a scarring effect in their assimilation path. Change in the employment composition across occupations with different skill contents is the key driver: were occupational attainment during periods of high unemployment unchanged for immigrants, assimilation in annual earnings would slow down on average by only 3 years, instead of 12. Slower assimilation costs between 1.7 and 2.5 percent of lifetime earnings to immigrants entering the US labor market when unemployment is high.

This study investigates the impact of teachers’ stereotyping of non-local students in terms of both academic performance and noncognitive outcomes using a random assignment of Chinese middle school students to teachers. We find that biased beliefs against non-local students, particularly among Chinese teachers, negatively affect non-local students by decreasing academic performance and increasing behavioral problems, with no significant effects on local students. Mechanism analysis suggests that these negative outcomes result from reduced teacher engagement with non-local parents, weaker classroom integration, and diminished self-confidence among non-local students. The negative effects are especially pronounced for non-local boys while non-local girls show resilience by increasing their efforts. These results highlight the critical role of teachers’ stereotyping in shaping disparities in human capital development between local and non-local students.

This paper studies a place-based industrial policy (PBIP) aiming to establish industrial clusters in Italy in the 1960s-70s. Combining historical archives spanning one century with administrative data and leveraging exogenous variation in government intervention, we investigate both the immediate effects of PBIP and its long-term implications for local development. We document agglomeration of workers and firms in the targeted areas persisting well after the end of the policy. By promoting high-technology manufacturing, PBIP favored demand for business services and the emergence of a skilled local workforce. Over time, this produced a spillover from manufacturing – the only sector targeted by the program – to services, especially in knowledge-intensive jobs. Accordingly, we estimate higher local wages, human capital, and house prices in the long run. We provide suggestive evidence that these persistent effects may depend on the initial conditions of targeted locations.

This paper shows that self-employment shapes labor market power in low-income countries, affecting industrial development. Using Peruvian data, we show that wage-setting power increases with concentration, but less so where self-employment is more prevalent. A general equilibrium model shows that while concentration increases oligopsony power, it also raises labor supply elasticity by pushing workers into self-employment, thereby mitigating labor market power. Conversely, pro-competitive policies that draw workers into salaried jobs may increase labor market power, with limited overall impact. We demonstrate that these policies are only effective if they tackle labor market power.

Do immigrants make goods from their origin country more accessible to their non-immigrant neighbors? We augment U.S. grocery scanner data to include the origin country of both households and products, thereby enabling the first direct estimate of how local immigrant presence affects import penetration. Using a quantitative model of trade, we show that immigrants increase the grocery import expenditure share by 8%. Three quarters of this effect is attributable to immigrants’ own disproportionate preferences for imported goods. Immigrants therefore raise import expenditures primarily through their own consumption, with muted benefits for their non-immigrant neighbors. The benefits that do accrue to natives are concentrated within high-income and urban households.

We analyze trends in labor-market returns to psychological traits using data from half a million Finnish men from 2001 to 2015. Cognitive skills’ value declined, while noncognitive skills’ value increased. Our novel findings show that extraversion drives this rise, while conscientiousness remains stable. Extraversion’s rising returns are most pronounced for lower earners and those on the employment margin. These traits predict different labor market paths: extraversion predicts lower education and more work experience, while cognitive ability and conscientiousness lead to higher education and high-paying jobs

Abstract: This paper studies the effects of a large welfare benefit reduction on the children in the affected families. The welfare cut targeted adult refugees who received residency in Denmark, and it reduced their disposable income by 30 percent on average over the first five years. We show that children exposed to the welfare cut during preschool and school-age obtained lower GPAs, experienced reduced well-being and overall education levels, and suffered lower employment and earnings as adults. Children in their teens at exposure faced large increases in conviction probabilities for violent and property crimes.

We unbox developments in artificial intelligence (AI) to estimate how exposure to these developments affect firm-level labour demand, using detailed register data from Denmark, Portugal and Sweden over two decades. Based on data on AI capabilities and occupational work content, we develop and validate a time-variant measure for occupational exposure to AI across subdomains of AI, such as language modelling. According to the model, white collar occupations are most exposed to AI, and especially white collar work that entails relatively little social interaction. We illustrate its usefulness by applying it to near-universal data on firms and individuals from Sweden, Denmark,and Portugal, and estimating firm labour demand regressions. We find a positive (negative) association between AI exposure and labour demand for high-skilled white (blue) collar work. Overall, there is an up-skilling effect, with the share of white-collar to blue collar workers increasing with AI exposure. Exposure to AI within the subdomains of image and language are positively (negatively) linked to demand for high-skilled white collar (blue collar) work, whereas other AI-areas are heterogeneously linked to groupsof workers.

Study abroad migration is the fastest growing international migration flow. However, the college completion rates of students from low-income countries are often modest in OECD countries, raising the hypothesis that these migrants are poorly informed about the costs and benefits of their decision. Our work tests this hypothesis by running a lab-in-the-field experiment where graduating high school students in Cape Verde are faced with incentivized decisions to apply for college studies abroad. Our results show that potential migrants react strongly to information about the availability of financial support and about college completion rates. Since subjects’ prior beliefs on availability of financial support are overestimated, it is likely that study migrants need to shift their time from study to work after uninformed migration, which likely harms their scholar performance. Policies that inform potential migrants of actual study funding possibilities should decrease study migration flows but are likely to improve successful graduation.

In this paper, we present evidence from quantitative research over the last decade on how the social capital of individuals in Aotearoa New Zealand is associated with birthplace and, for migrants, years since migration. We also consider the effects of spatial sorting and ethnic diversity on social capital formation. Aotearoa New Zealand has one of the highest rates of immigration in the OECD and, consequently, one of the highest shares of foreign-born individuals in the population. Additionally, the population is characterized by high ethnic diversity and a large indigenous population, with Māori representing 17 percent of the population. Using several data sources, we measure social capital by focusing on participation and volunteering in a range of community activities, perceptions of safety and inclusion, and voting in elections. Regression modelling shows that, as expected, migrants have little local social capital upon arrival. However, differences between their social capital and that of native-born individuals reduce considerably as the duration of residence in Aotearoa New Zealand increases. When the migrant share in a region is larger than the national average, migrants invest less in bridging social capital. Migrant clustering within a region increases their investment in bonding social capital. Bridging activities are associated with better employment outcomes. Less than one in five respondents in the utilized survey data report discrimination, and for migrants, discrimination declines with years of residence. However, the trend in discrimination has been upward over time and particularly affects non-European migrants and persons identifying with Māori and Pacific Peoples ethnicities. Residential location matters. Greater ethnic diversity is associated with the perception of a less safe neighbourhood, but individuals in ethnically diverse regions experience relatively less discrimination. Additionally, there is more involvement in elections in such regions. In contrast, greater ethnic polarisation in regions is associated with less civic engagement and more discrimination.

This paper studies the interaction between parental and public inputs in children’s skill formation. We perform a longer-run follow-up study of a randomized controlled trial that increased preschool quality and initially improved skills significantly for children of all backgrounds. There is, however, complete fade-out for children with highly educated parents. Given positive long-run effects for children with low-educated parents, the treatment reduces child skill gaps across parents’ education by 46%. We show that the heterogeneous treatment effects are a result of differences in parents’ responses in terms of investments, reacting to school quality later in childhood. There is also evidence of cross-productivity between reading and math skills and socio-emotional development.

Legal and illegal markets often coexist. In theory, marginal legalization can either substitute for the remaining parallel market, or complement it via scale effects. I study migrants crossing without prior authorization at the US southwest border, where large-scale unlawful crossing coexists with substantial, varying, and policy-constrained lawful crossing. I test whether lawful and unlawful crossing are gross substitutes or complements, using lag-augmented local projections to analyze a monthly time-series on the full universe of 10,658,497 inadmissible migrants encountered from October 2011 through July 2023. Expanded lawful crossings cause reduced unlawful crossings, an effect that grows over time and reaches elasticity –0.3 after approximately 10 months. That is, in this case, expanded activity on the lawful market substitutes for the parallel market, even net of scale effects. This deterrent effect explains approximately 9 percent of the overall variance in unlawful crossings. In an ancillary finding, I fail to reject a null effect of depenalizing unlawful crossings on future attempted unlawful crossings.

We investigate the role of cultural norms in shaping women’s labor supply decisions after childbirth. Specifically, we are interested in the interplay between childhood socialization and adulthood environment. To that end, we leverage the setting of the German reunification when East Germany’s gender egalitarian culture induced by socialism and West Germany’s more traditional culture were brought together. We find that East German gender norms are persistent whereas West German ones are not. West German mothers adjust their behavior to that of their East German peers not only when immersed in East German environment but even after returning to the West.

The article investigates the long-term economic effects of immigrant diversity. Focusing on the large immigration wave experienced by Brazil at the turn of the twentieth century, we ask whether municipalities in the State of São Paulo that received a population of immigrants characterized by a more diverse mix of origin countries ended up having better long-term economic outcomes. To identify causal effects, we leverage on unique historical individual-level data in immigrants arriving in São Paulo between 1880 and 1920, and develop an instrumental variable strategy that combines time variation in the composition of immigrants arriving from overseas with the timing of the railway network expansion in the state. We find that a one standard deviation increase in accumulated immigrant diversity in 1920 is associated with a 7-8% higher income per capita in 2000. This effect is economically relevant and robust to various identification tests. Furthermore, when exploring the mechanisms through which immigrant diversity affected long-term development, we document that municipalities that hosted more a more diverse pool of immigrants experienced (i) larger proportions of employment in manufacturing and services as well as greater occupational diversity within manufacturing in the long-term; (ii) higher investment in public goods, as measured by municipal spending on education; (iii) and higher education outputs in the long-run.

We show that providing publicly available wage information in vacancies, so-called external pay transparency, can reduce the gender gap in entry wages. There is an increasing interest in pay transparency policies as a tool to combat unequal pay. We exploit a reform of Austria’s Equal Treatment Law to evaluate how providing wage information in vacancies affects the gender wage gap. To take into account that the value of providing such external pay information is likely to be heterogeneous along the wage distribution, we implement a Quantile Difference-in-Difference model. The reform led to a small overall reduction of the gender wage gap. Our main results highlight that reductions in the wage gap are larger in circumstances where women are likely to hold misspecified beliefs about their labor market options and when they have to make job acceptance decisions under pressure. The reduction in the gender wage gap was caused by an increase in women’s earnings, particularly at the lower part of the distribution. Earnings of men, on the other side, remained largely constant. Our results lend support to policy proposals aimed at increasing external pay transparency.

Can participation in safety net programs have long-lasting negative effects across multiple generations? Prior work shows a 1993 Dutch disability insurance reform which tightened requirements and lowered benefits for participants resulted in better outcomes for their children. We study the third generation, finding that grandchildren of individuals whose DI eligibility and benefits were reduced are less likely to be born premature, have low birthweight, or experience complicated deliveries. They also have better health and schooling outcomes during early childhood. These early-life improvements are consequential, as they have been linked to better health, education, and labor market outcomes in adulthood.

What makes diversity unifying in some settings but divisive in others? We examine how the mixing of ethnic groups in German schools affects intergroup cooperation and trust. We leverage the quasi-random assignment of students to classrooms within schools to obtain variation in the type of diversity that prevails in a peer group. We combine this with a large-scale, incentivized lab-in-field-experiment based on the investment game, allowing us to assess the in-group bias of native German students in their interactions with fellow natives (in-group) versus immigrants (out-group). We find in-group bias peaks in culturally polarized classrooms, where the native and immigrant groups are both large, but have different religious or language backgrounds. In contrast, in classrooms characterized by non-cultural polarization, fractionalization, or a native supermajority, there are significantly lower levels of own-group favoritism. In terms of mechanisms, we find empirical evidence that culturally polarized classrooms foster negative stereotypes about immigrants’ trustworthiness and amplify taste-based discrimination, both of which are costly and lead to lower payouts. In contrast, accurate statistical discrimination is ruled out by design in our experiment. These findings suggest that extra efforts are needed to counteract low levels of inclusivity and trust in culturally polarized environments.

We estimate the labor market power of over 13,000 manufacturing establishments across 82 low and middle-income countries around the world. Within local labor markets, larger and more productive firms have higher wage markdowns and pay lower wages. Labor market power across countries exhibits a mild non-linear relationship with GDP per capita, entirely driven by a strong hump-shaped relationship with the share of self-employed workers. Labor market institutions fully account for the hump shape: in countries with unemployment protection, wage markdowns increase with the share of self-employment while the opposite is true in countries without it. We explain this finding through the lens of a simple oligopsonistic labor market model with frictions. Self-employment prevalence correlates with the elasticity of labor supply to the wage paid, and labor market institutions can change the sign of this relationship.

Tighter money-laundering regulations in offshore financial havens may inadvertently spur incentives to launder money domestically. Our study exploits regulations targeting financially based money laundering in Caribbean jurisdictions to uncover the creation of front companies in the United States. We find that counties exposed via offshore financial links to these jurisdictions experienced an increase in business activities after the tightening of anti-money-laundering regulations. The effect is more pronounced among small firms, in sectors at high risk of money laundering, and in regions with high intensities of drug trafficking. Our work provides the first empirical evidence of the real effects of policy-induced money-laundering leakage.

We use the elements of a macroeconomic production function—physical capital, human capital, labor, and technology—together with standard growth models to frame the role of religion in economic growth. Unifying a growing literature, we argue that religion can enhance or impinge upon economic growth through all four elements because it shapes individual preferences, societal norms, and institutions. Religion affects physical capital accumulation by influencing thrift and financial development. It affects human capital through both religious and secular education. It affects population and labor by influencing work effort, fertility, and the demographic transition. And it affects total factor productivity by constraining or unleashing technological change and through rituals, legal institutions, political economy, and conflict. Synthesizing a disjoint literature in this way opens many interesting directions for future research.

This paper introduces the concept of “climate matching” as a driver of migration and establishes several new results. First, we show that climate strongly predicts the spatial distribution of immigrants in the US, both historically (1880) and more recently (2015), whereby movers select destinations with climates similar to their place of origin. Second, we analyze historical flows of German, Norwegian, and domestic migrants in the US and document that climate sorting also holds within countries. Third, we exploit variation in the long-run change in average US climate from 1900 to 2019 and find that migration increased more between locations whose climate converged. Fourth, we verify that results are not driven by the persistence of ethnic networks or other confounders, and provide evidence for two complementary mechanisms: climate-specific human capital and climate as amenity. Fifth, we back out the value of climate similarity by: i) exploiting the Homestead Act, a historical policy that changed relative land prices; and, ii) examining the relationship between climate mismatch and mortality. Finally, we project how climate change shapes the geography of US population growth by altering migration patterns, both historically and into the 21st centur

Is naturalization an effective tool to boost refugees’ labor market integration? We address this novel empirical question by exploring survey data from 21 European countries and leveraging variation in citizenship laws across countries, time, and migrant groups as a source of exogenous variation in the probability of naturalization. We find that obtaining citizen status allows refugees to close their gaps in labor market outcomes relative to non refugee migrants while having non-significant effects on the latter group. We then further explore the heterogeneity of returns to citizenship in a Marginal Treatment Effect framework, showing that migrants with the lowest propensity to naturalize would benefit the most if they did. This reverse selection on gains can be explained by policy features that make it harder for more vulnerable migrant groups to obtain citizenship, suggesting that a relaxation of eligibility constraints would yield benefits for both migrants and host societies.

We investigate the employment consequences of deindustrialization for 1,993 cities in France, Germany, Great Britain, Italy, Japan, and the United States. In all six countries we find a strong negative relationship between a city’s share of manufacturing employment in the year of its country’s manufacturing peak and the subsequent change in total employment, reflecting the fact that cities where manufacturing was initially more important experienced larger negative labor demand shocks. But in a significant number of cases, total employment fully recovered and even exceeded initial levels, despite the loss of manufacturing jobs. Overall, 34% of former manufacturing hubs–defined as cities with an initial manufacturing employment share in the top tercile–experienced employment growth faster than their country’s mean, suggesting that a surprisingly large number of cities was able to adapt to the negative shock caused by deindustrialization. The U.S. has the lowest share, indicating that
the U.S. Rust Belt communities have fared relatively worse compared to their peers in the other countries. We then seek to understand why some former manufacturing hubs recovered while others didn’t. We find that deindustrialization had different effects on local employment depending on the initial share of college-educated workers in the labor force. While in the two decades before the manufacturing peak, cities with a high college share experienced a rate of employment growth similar to those with a low college share, in the decades after the manufacturing peak, the employment trends diverged: cities with a high college share experienced significantly faster employment growth. The divergence grows over time at an accelerating rate. Using an instrumental variable based on the driving distance to historical colleges and universities, we estimate that a one standard deviation increase in local college share results in a rate of employment growth per decade that is 9.1 percentage point higher. This effect is in part explained by faster growth in human capital-intensive services, which more than offsets the loss of manufacturing jobs.

This paper examines international temporary migration as an intermediary step among aspiring entrepreneurs to accumulate the needed capital when they face credit constraints at home. The analysis is based on a representative dataset of lifetime employment histories of return migrants from Bangladesh. After establishing the credit constraints that potential entrepreneurs face, the paper shows that non-agricultural self-employment rates are significantly higher among returning migrants over half versus around 20% of non-migrants. Most migrants transition into self-employment by using their savings from abroad as the main source of financing. The paper then offers, for the first time, a detailed account of the financial costs and benefits of international migration. Our findings suggest that temporary migration can contribute to the structural transformation of lower-income countries by enabling credit-constrained workers to enter into non-agricultural entrepreneurship.

Germany has become the second-most important destination for migrants worldwide. Using all waves from the microcensus, we study their labor market integration over the last 50 years and highlight differences to the US case. Although the employment gaps between immigrant and native men decline after arrival, they remain large for most cohorts; the average gap after one decade is 10 pp. Conversely, income gaps tend to widen post-arrival. Compositional differences explain how those gaps vary across groups, and why they worsened over time; after accounting for composition, integration outcomes show no systematic trend. Still, economic conditions do matter, and employment collapsed in some cohorts after structural shocks hit the German labor market in the early 1990s. Lastly, we examine the integration of recent arrivals during the European refugee “crisis” and the Russo-Ukrainian war.

We analyze an immigration reform in Denmark that tightened refugee immigrants’ eligibility criteria for permanent residency to incentivize their labor market attachment and acquisition of local language skills. Contrary to what the reform intended, the overall employment of those affected decreased while their average language proficiency remained largely unchanged. This was caused by a disincentive effect, where individuals with low prereform labor market performance reduced their labor supply. Our findings suggest that stricter permanent residency rules, rather than incentivizing refugees’ skill investment, may decrease the efforts of those who believe they cannot meet the new requirements.

We investigate the consequences of structural change for workers displaced from the manufacturing sector. Manufacturing establishments traditionally employed low- and high-wage workers in similar proportions and paid substantial wage premiums to both types of workers. Structural change has led to the disappearance of these jobs, particularly for low-wage workers. Decomposing displacement wage losses, we show that low-wage workers suffer considerable losses in establishment premiums following displacement, whereas high-wage workers tend to fall down the match quality ladder. With ongoing structural change, losses in wages and establishment premiums have increased over time,
especially for low-wage workers, in part because they are increasingly forced to switch to low knowledge service jobs where establishment premiums are low. Our findings further highlight that structural change and layoffs in manufacturing have significantly contributed to job polarization and the rise in assortative matching of workers to firms

This paper investigates the roots of potential labour-market discrimination underlying the negative correlation between obesity and hourly wages. Using a panel dataset of white individuals drawn from the U.S. 1997 National Longitudinal Survey of Youth (NLSY97), we test whether residual wage gaps could be attributed to prejudice (taste-based discrimination) and/or statistical discrimination. To this end, we examine how these two types of discrimination hinge on a wide range of obese individuals’ specific job and occupational characteristics (drawn from the O*Net Online database). In particular, our analysis sheds light on whether discrimination originates from clients’ attitudes, fellow workers or employers. Our findings are consistent with taste-based discrimination against obese females, especially as they become older, in jobs requiring frequent communication with either clients or employers. However, the evidence on this issue is weaker for males. We conjecture that these differences may originate from both an over-representation of males among employers and different image concerns against people of the same gender.

We study how temporary visa schemes can be designed to drive smugglers out of business while meeting labor market needs in host countries. After discussing their compatibility with a large range of policy objectives, we show how combining internal and external controls with a regulated market for temporary visas alleviates the policy trade-off between migration control and ending human smuggling. We use information on irregular migration from Senegal to Spain and the Democratic Republic of Congo to South Africa to calibrate the “eviction” prices of visas for these two routes, which
are set to throttle smuggling activities. Our results highlight important constraints for governments seeking to prevent temporary workers from overstaying, especially on south-north routes such as Senegal to Spain. They suggest combining a regulated market for visas with tighter sanctions against employers of undocumented workers as a way forward.

This paper documents several new facts about the relationship between discrimination and political exclusion and the motivation to fight in wartime. The Pearl Harbor attack triggered a sharp increase in volunteer enlistment rates of American men, the magnitude of the increase was smaller for Black men than for white men and the Black-white gap was larger in counties with higher levels of racial discrimination. Discrimination reduced the quantity and the quality of Black volunteers. The discouraging effects of discrimination were more pronounced in places that were geographically distant from Pearl Harbor and in states that had joined the Union relatively recently. For Japanese-American men, enlistment rates were higher where the Japanese-American community was not interred than where it was interred. These and other results provide empirical support for the theory that discrimination and political exclusion reduce support for the government when it is under threat.

To determine how wives’ and husbands’ retirement options affect their spouses’ (and their own) labour supply decisions, we exploit (early) retirement cutoffs by way of a regression discontinuity design. Several German pension reforms since the early 1990s have gradually raised women’s retirement age from 60 to 65, but also increased ages for several early retirement pathways affecting both sexes. We use German Socio-Economic Panel data for a sample of couples aged 50 to 69 whose retirement eligibility occurred (i) prior to the reforms, (ii) during the transition years, and (iii) after the major set of reforms. We find that, prior to the reforms, when several retirement options were available to both husbands and wives, both react almost symmetrically to their spouse reaching an early retirement age, that is both husband and wife decrease their labour supply by about 5 percentage points when the spouse reaches age 60). This speaks in favour of leisure complementarities. However, after the set of reforms, when retiring early was much more difficult, we find no more significant labour supply reaction to the spouse reaching a retirement age, whereas reaching one’s own retirement age still triggers a significant reaction in labour supply. Our results may explain some of the diverse findings in the literature on asymmetric reactions between husbands and wives to their spouse reaching a retirement age: such reactions may in large parts depend on how flexibly workers are able to retire.

The 1965 Voting Rights Act (VRA) paved the road to Black empowerment. How did southern whites respond? Leveraging newly digitized data on county-level voter registration rates by race between 1956 and 1980, and exploiting pre-determined variation in exposure to the federal intervention, we document that the VRA increases both Black and white political participation. Consistent with the VRA triggering countermobilization, the surge in white registrations is concentrated where Black political empowerment is more tangible and salient due to the election of African Americans in county commissions. Additional analysis suggests that the VRA has long-lasting negative effects on whites’ racial attitudes.

This paper investigates the relationship between immigration and inequality in the UK over the past forty years. This is a period when the share of foreign-born in the UK population increased from 5.3% in 1975 to 13.4% in 2015. We evaluate the impact immigration had on wage inequality in the UK through two channels: the first is the effect on the earnings distribution of the natives and the second is the effect on the composition of the wage-earning population. We find both effects to be very small. We decompose wage inequality into inequality within the immigrant and native group and inequality between the two groups. We find inequality among immigrants to be consistently higher than inequality among natives. We also examine the impact of immigration on the fiscal budget, and the potentially unequal impact of the ensuing tax implications on natives. In the UK, where immigrants are net fiscal contributors, this is not a factor that aggravates economic inequality. Even though the impact of immigration is found to be small, the way it is perceived across different population groups in the UK varies; a fact mostly attributed to racial and cultural concerns rather than perceived economic competition

In spring 2005, the Ombud for Equal Treatment in Austria launched a campaign notifying employers and newspapers that gender preferences in job ads were illegal. At the time over 40% of vacancies on the nation’s largest job board stated a gender preference; within a year the rate fell below 5%. We merge job board vacancies and employer records to study how the campaign affected hiring choices and the gender diversity of occupations and workplaces. Using pre-campaign data, we predict the use of gender preferences, then conduct a difference-in-differences analysis of hiring outcomes for vacancies with predicted male or female preferences, relative to those with no predicted preferences. The elimination of explicit gender preferences boosted the share of women hired for jobs that were likely to be targeted to men (and vice versa). At the firm level, we find that the campaign led to a rise in the share of women at firms that were more likely to use male SGP’s, and a symmetric increase in the share of men at firms that were likely to use female SGP’s, with no effects on firm survival, employment, or average wages.

This paper analyzes the effects of Denmark’s Start Aid welfare reform that targets refugees. Implemented in 2002, it enables us to study not only the reform’s immediate effects, but also its longer-term consequences, and its repeal a decade later. The reform-induced large transfer cuts led to an increase in employment rates, but only in the short run. Overall, the reform increased poverty rates and led to a rise in subsistence crime. Moreover, local demand conditions generate substantial heterogeneity in the reform’s effects on immediate and longer-term employment.

Using an identification strategy based on random assignment of refugees to different municipalities in Denmark between 1986 and 1998, we find strong evidence that gang crime rates in the neighbourhood at assignment increase the probability of boys to commit crimes before the age of 19, and that gang crime (but not other crime) increases the likelihood of teenage motherhood for girls. Higher levels of gang crime also have detrimental and long-lasting effects, with men experiencing significantly higher levels of inactivity and women experiencing lower earnings and higher levels of welfare benefit claims at ages 19 to 28.

In this paper we describe the development, calibration and validation of a dynamic spatial microsimulation model for projecting small area (area unit) ethnic populations in Auckland, New Zealand’s most culturally diverse city, in which about 40 percent of the population is foreign born. The key elements of the microsimulation model are a module that projects residential mobility within Auckland and migration between Auckland and the rest of the world, and a module that projects mobility in ethnic identity. The model is developed and calibrated using data on 1996-2001 linked populations in the New Zealand Longitudinal Census (NZLC) 1981-2006. We compare the microsimulation results with the actual 2006 population in each area unit. We find that in terms of indexes of overall residential sorting and ethnic diversity, our projected values are very close to the actual values. At a more disaggregated spatial scale, the model performs well in terms of the simulated normalised entropy measure of ethnic diversity in area units, but performs less well in terms of projecting residential sorting for each individual ethnic group.

In this paper, we study the effects of economic integration with democracies on individuals’ democratic values and on countries’ institutions. We combine survey data with country level measures of democracy from 1960 to 2015, and exploit improvements in air, relative to sea, transportation to derive a time-varying instrument for trade. We find that economic integration with democracies increases both citizens’ support for democracy and countries’ democracy scores. Instead, trade with non-democracies has no impact on either attitudes or institutions. The effects of trade with democracies are stronger when partners have a longer history of democracy, grow faster, spend more on public goods, and are culturally closer. They are also driven by imports, rather than exports, and by integration with partners that export higher quality goods and that account for a larger share of a country’s trade in institutionally intensive, cultural, and consumer goods as well as in goods that involve more face-to-face interactions and entail higher levels of bilateral trust.
These patterns are consistent with trade in goods favoring the transmission of democracy by signaling the (actual or perceived) desirability of the latter. We examine alternative mechanisms, and conclude that none of them can, alone, explain our findings.

We present evidence whereby immigration increases labour productivity while reducing the labour share, thus redistributing income from workers to employers. This result is unlikely in competitive markets with skill-neutral capital, where labour share is orthogonal to immigration shocks in the long run. Instead, our empirical evidence better matches predictions from imperfect labour market models where immigrant and native workers are heterogeneous in both skills and labour supply elasticities.

This study examines disparities in health and nutrition among native and Syrian-refugee children in Turkey. With a view toward understanding the need for targeted programs addressing child well-being among the refugee population, we analyze, in particular, the Turkey Demographic and Health Survey (TDHS). The TDHS is one of few data sets providing representative data on health and nutrition for a large refugee and native population. We find no evidence of a difference in infant or child mortality between refugee children born in Turkey and native children. However, refugee infants born in Turkey have lower birthweight and age-adjusted weight and height than native infants. When we account for a rich set of birth and socioeconomic characteristics that display substantial differences between natives and refugees, the gaps in birthweight and age-adjusted height persist, but the gap in age-adjusted weight disappears. Although refugee infants close the weight gap at the mean over time, the gap at the lower end of the distribution persists. The rich set of covariates we use explains about 35% of the baseline difference in birthweight and more than half of the baseline difference in current height. However, even after that, refugee infants’ average birthweight is 0.17 standard deviations (sd) lower and their current height is 0.23 sd lower. These gaps are even larger for refugee infants born prior to migrating to Turkey, suggesting that remaining deficits reflect conditions in the source country prior to migration rather than deficits in access to maternal and child health services within Turkey.

This paper analyzes the impact of source-country culture on the labor supply of female immigrants in Europe. We find that the labor supply of immigrant women is positively associated with the female-to-male labor force participation ratio in their source country, which serves as a proxy for the country’s preferences and beliefs regarding women’s roles. This suggests that the culture and norms of their source country play an important role for immigrant women’s labor supply. However, contradicting previous evidence for the U.S., we do not find evidence that the cultural effect persists through the second generation.

Many research and policy questions surrounding migration are causal questions. We want to know what causes people to migrate, and what the consequences of migration are for the migrants, their families, and their communities. However, answering these questions requires dealing with the self-selection inherent in migration choices. Field and natural experiments offer methodological approaches that enable answering these causal questions. We discuss the key conceptual and logistical issues that face applied researchers when applying these methods to the study of migration, as well as providing guidance for practitioners and policymakers in assessing the credibility of causal claims. For randomized experiments, this includes providing a framework for thinking through what can be randomized; discussing key measurement and design issues that arise from issues such as migration being a rare event, and in measuring welfare changes when people change locations; as well as discussing ethical issues that can arise. We then outline what makes for a good natural experiment in the context of migration and discuss the implications of recent econometric work for the use of difference-in-differences, instrumental variables (and especially shift-share instruments), and regression discontinuity methods in migration research. A key lesson from this recent work is that it is not meaningful to talk about “the” impact of migration, but rather impacts are likely to be heterogeneous, affecting both the validity and interpretation of causal estimates.

This paper investigates the effects of technological and organizational change (T&O) on jobs and workers. We show that although T&O reduces firm demand for routine relative to abstract task-based jobs, affected workers do not face higher probability of non-employment or lower earnings growth than unaffected workers. Rather, firms that adopt T&O offer routine workers re-training opportunities to upgrade to more abstract jobs. Older workers form an important exception: T&O increases the risk that they permanently withdraw from the labor market and reduces their earnings, regardless of the tasks they performed in the firm prior to T&O.

The U.S. limits work visas for low-skill jobs outside of agriculture, with a binding quota that firms access via a randomized lottery. We evaluate the marginal impact of the quota on firms entering the 2021 H-2B visa lottery using a novel survey and pre-analysis plan. Firms exogenously authorized to employ more immigrants significantly increase production (elasticity +0.16) with no decrease or an increase in U.S. employment (elasticity +0.10, statistically imprecise) across several pre-registered subsamples. The results imply very low substitutability of native for foreign labor in the policy-relevant occupations. Forensic analysis suggests similarly low substitutability of black-market labor.

We provide the  first estimates of intergenerational income mobility for a developing country, namely Brazil. We measure formal income from tax and employment registries, and we train machine learning models on census and survey data to predict informal income. The data reveal a much higher degree of persistence than previous estimates available for developed economies: a 10 percentile increase in parental income rank is associated with a 5.5 percentile increase in child income rank, and persistence is even higher in the top 5%. Children born to parents in the first income quintile face a 46% chance of remaining at the bottom when adults. We validate these estimates using two novel mobility measures that rank children and parents without the need to impute informal income. We document substantial heterogeneity in mobility across individual characteristics - notably gender and race - and across Brazilian regions. Leveraging children who migrate at different ages, we estimate that causal place effects explain 57% of the large spatial variation in mobility. Finally, assortative mating plays a strong role in household income persistence, and parental income is also strongly associated with several key long-term outcomes such as education, teenage pregnancy, occupation, mortality, and victimization.

Do violent conflicts increase religiosity? This study draws on evidence from a large-scale survey on refugees in Germany linked with data on time-varying conflict intensity in refugees’ birth regions prior to the survey interview. The results show that the greater the number of conflict-induced fatalities in the period before the interview, the more often refugees pray. The relationship between conflict and praying holds equally across demographic subgroups. Evidence suggests that both short- and long-term cumulative fatalities in refugees’ birth regions affect how often they pray. Additionally, the link between conflict and praying is stronger for refugees who have family and relatives still living in their country of origin. Finally, we show that the conflicts that matter are those occurring within the refugees’ specific region of birth rather than in other regions in the country. Implications for existential insecurity theory and cultural evolutionary theory are discussed.

The H-1B program allows firms in the United States to temporarily hire high[1]skilled foreign citizens. The government restricts foreign labor inflows and therefore generates potential rents typical of a quota. However, the US allocates H-1B status by random lottery. We develop a theoretical model demonstrating that this lottery creates a negative externality by incentivizing firms to search for more workers than can actually be hired and, in so doing, completely destroys quota rents. Moreover, some firms specialize in hiring foreign labor and contracting out those workers’ services to third-party sites, and this outsourcing behavior both exacerbates lost quota rents and leads to an increased concentration of H-1B workers among a small number of firms. Simple numerical exercises suggest that the H-1B lottery and outsourcing result in an annual economic loss exceeding $10,000 per new H-1B worker hired relative to what would occur under a quota alone.

We investigate the effects of long-distance moves of married couples on both spouses’ earnings, employment and job characteristics based on a new administrative dataset from Germany. Employing difference-in-difference propensity score matching and accounting for spouses’ pre-move employment biographies, we show that men’s earnings increase significantly after the move, whereas women suffer large losses in the first years. Men’s earnings increases are mainly driven by increasing wages and switches to slightly larger and better paying firms. Investigating effect heterogeneity with respect to pre-move relative earnings or for whose job opportunity couples move, confirms strong gender asymmetries in gains to moving.

Irregular migration from West Africa to Europe across the Sahara and Mediterranean is extremely risky for migrants and a key policy concern. A cluster-randomized experiment with 3,641 young men from 391 settlements in The Gambia is used to test three approaches to reducing risky migration: providing better information and testimonials about the risks of the journey, facilitating migration to a safer destination by providing information and assistance for migration to Dakar, and offering vocational skill training to enhance domestic employment opportunities. Current migration to Senegal was increased by both the Dakar facilitation and vocational training treatments, partially crowding out internal migration. The vocational training treatment reduced intentions to migrate the backway and the number of steps taken toward moving. However, the backway migration rate from The Gambia collapsed, even in the control group, resulting in no space for a treatment effect on irregular migration from any of the three interventions.

The evidence for the effects of early childhood education on risky behavior in adolescence is limited. This paper studies the consequences of a reform of a large-scale universal kindergarten program in Japan. Exploiting a staggered expansion of kindergartens across regions, we estimate the effects of the reform using an event study model. Our estimates indicate that the reform significantly reduced juvenile violent arrests and the rate of teenage pregnancy, but we do not find that the reform increased the high school enrolment rate. We suspect that improved non-cognitive skills can account for the reduction of risky behavior in adolescence.

Although school integration of the children of economic migrants in developed countries is well-studied in the literature, little evidence based on large-scale representative data exists on the school integration of refugee children—many of whom live in low- or middle-income countries. This study focuses on Syrian refugee children in Turkey and examines the underlying causes of native– refugee differences in school enrolment. For this purpose, we use the 2018 Turkish Demographic and Health Survey, which includes a representative sample of Syrian refugee households. Accounting for a rich set of socioeconomic variables, we find that the native–refugee gap in school enrolment drops by half for boys and two-thirds for girls, but the gap persists for both genders. When we restrict the sample to refugees who arrived in Turkey at or before age 8 and account for socioeconomic differences, the native–refugee gap completely vanishes for both boys and girls, indicating that school integration of refugee children in Turkey has been possible conditional on their age at arrival. We also find that the timing of boys’ school dropouts coincides with their entry into the labor market, whereas girls’ dropouts mostly occur before marriage age. Finally, we reveal important differences between natives and refugees, as well as early and late arrivers among refugees, in never starting school, grade progression and repetition, dropping out, and grade for age.

This paper explores how immigrants may address nursing home staffing shortages that are likely to worsen as baby boomers age. We show that more immigrant labor leads to fewer falls, less usage of restraints, and fewer pressure ulcers among nursing home residents, as well as improvements in other measures of quality of care. Consistent with a labor market explanation, we find that immigration increases the local supply of nurse assistants – the workers responsible for hands-on care in nursing homes. Additionally, we find evidence of crowding-in of natives into the nursing assistant occupation, consistent with lower-skilled immigrants displacing natives away from informal employment in household services. Finally, we show that that immigration leads to better nursing home care quality only in competitive nursing home markets.

Obesity not only leads to immense medical costs associated with treating obesity-related illness but is also associated with lower employment prospects and earnings. This study shows that sunshine-induced vitamin D may have a preventive effect on obesity for children. It investigates the relation between sun intensity from pregnancy until infancy on obesity at age six, using population data of more than 600,000 children. Our findings show that the effects of sun intensity on subsequent obesity are concentrated in the first six months of life: 100 hours of additional sunshine over this period reduce overweight by 1.1 percent and severe obesity by 6.2 percent. We offer two main explanations for this pattern. First, infants’ vitamin D levels are particularly sensitive to sunshine in the first six months of life, when lactation is highest. Second, the first six months of life are a sensitive period for later obesity, as this is the period when infants rapidly gain weight and adipose tissue develops.

This paper uses Indian EUS-NSSO data on 32 states/union territories and 570 districts for a bi-annual panel with 5 waves to estimate how regional population reacts to asymmetric shocks. These shocks are measured by non-employment rates, unemployment rates, and wages in fixed-effects regressions which effectively use changes in these indicators over time within regions as identifying information. Because we include region and time effects, we interpret regression-adjusted population changes as proxies for regional migration. Comparing the results with those for the United States and the European Union, the most striking difference is that, in India, we do not find any significant reactions to asymmetric non-employment shocks at the state level, only at the district level, whereas the estimates are statistically significant and of similar size for the state/NUTS-1 and district level in both the United States and Europe. We find that Indian workers react to asymmetric regional shocks by adjusting up to a third of a regional non-employment shock through migration within two years. This is somewhat higher than the response to non-employment shocks in the United States and the European Union but somewhat lower than the response to unemployment shocks in these economies. In India, the unemployment rate does not seem to be a reliable measure of regional shocks, at least we find no significant effects for it. However, we find a significant population response to regional wage differentials in India at both the state and district level.

This paper investigates the effects of local exposure to refugees on electoral outcomes in the 2016 state election in Germany. Based on quasi-random variation in the allocation of refugees across municipalities and unique data on refugee populations and their type of accommodation, I find that an increase in the population share of refugees increases the vote share of right-wing parties and decreases the vote share of the incumbent federal government parties. The electoral effects, however, are solely driven by refugees living in centralized accommodation, while no such effects are found for refugees living in decentralized accommodation. These findings have important implications for the design of public policies in handling future receptions of refugees, as they reveal that an earlier transfer of refugees from centralized to decentralized accommodation could attenuate a growing support for right-wing parties.

This paper shows that an integration policy aimed at unemployed adult immigrants generated positive spillovers for their children. Our research design builds on a discontinuity in the phase-in-rule of Finland’s 1999 reform that introduced integration plans—a new approach for allocating unemployed immigrants to active labor market policies. We find that parents’ integration plans substantially improved their children’s grades and educational attainment and reduced their time out of employment, education, or training. Our examination of potential mechanisms suggests that integration plans increased parents’ earnings, employment and exposure to native colleagues and pushed their children to better schools.

Distinguishing between short-run and long-run outcomes we provide new insight into the relationship between education and migration. We examine the specific link between the acquisition of high levels of human capital in the form of university education in Turkey and migration to Germany. We implement bounds testing procedures to ascertain the long-run relationships with the variables of interest in a migration model. Although the bounds testing procedure has advantages compared to other methods, it has not been widely implemented in the migration literature. We find a negative and decreasing non-linear long-run and short-run relationship between home country university education and Turkish migration to Germany over 1970-2015. Over the long run, increased higher education reduces emigration flows.

This paper examines whether proximity to language classes raises refugees’ language proficiency and improves their social and economic integration. Our identification strategy leverages the opening, closing and gradual expansion of local language training centers in Denmark, as well as the quasi-random assignment of the refugees to locations with varying proximity to a language training center. First, we show that refugees’ distance from the assigned language training center is as good as random. Second, we show that language skills decrease monotonically with commuting time such that a one-hour decrease in commuting time increases fluency in the Danish language by 4 to 6 percent relative to the sample mean. The exogenous variation in language proficiency generates substantial positive effects on post language training human capital acquisition and on the integration of the refugees in the local communities where they were initially placed, as measured by the lower exit rates from those same communities and lower mobility to the largest, most immigrant-dense, cities in Denmark.

Denmark has accepted refugees from a large variety of countries and for more than four decades. Denmark has also frequently changed policies and regulations concerning integration programs, transfer payments, and conditions for permanent residency. Such policy variation in conjunction with excellent administrative data provides an ideal laboratory to evaluate the effects of different immigration and integration policies on the outcomes of refugee immigrants. In this article, we first describe the Danish experience with refugee immigration over the past four decades. We then review different post-arrival refugee policies and summarize studies that evaluate their effects on the labor market performance of refugees. Lastly, we discuss and contrast these findings in the context of international studies of similar policies and draw conclusions for policy.

We use novel survey data to assess the impact of COVID-19 pandemic on the Libyan population. In our sample, 9.5% of respondents report that a household member has been infected by COVID-19, while 24.7% of them have suffered economic damages and 14.6% have experienced negative health effects due to the pandemic. Our analysis focuses on the differences between IDPs and non-displaced individuals, controlling for individuals and household characteristics, geo-localized measures of economic activity and conflict intensity. Displaced individuals do not experience higher incidence of COVID-19 relative to comparable non-displaced individuals, but are about 60% more likely than non-displaced respondents to report negative economic and health impacts caused by the pandemic. Our results suggest that the larger damages suffered by IDPs can be explained by their weaker economic status - which leads to more food insecurity and indebtedness - and by the discrimination they face in accessing health care.

We estimate the employment effects of a large program of public investment subsidies that ranked applications on a score reflecting both objective criteria and local politicians’ preferences. Leveraging the rationing of funds as an ideal RDD, we characterize the heterogeneity of treatment effects and cost-per-new-job across inframarginal firms, and we estimate the cost effectiveness of subsidies under factual and counterfactual allocations. Firms ranking high on objective criteria and firms preferred by local politicians generated larger employment growth on average, but the latter did so at a higher cost-per-job. We estimate that relying only on objective criteria would reduce the cost-per-job by 11%, while relying only on political discretion would increase such cost by 47%.

A child’s family structure is a fundamental determinant of future well-being, making it essential to understand how public policies affect the involvement of fathers. In this paper, we exploit a reform of the German parental leave system—which increased mother’s income and reduced legal father’s financial support burden—to measure the impact on the relationship contract choices of parents who were unmarried at conception. Based on detailed birth record data, we demonstrate that short-run reform incentives during the first period after birth nudge unmarried fathers into the long-term commitment of acknowledging paternity. This shift reduces single motherhood by 6% but leaves the share of marriages at birth constant. Moreover, the change in relationship contract choices is mostly driven by parents of boys. These findings are compatible with predictions from a model where parents choose between three types of relationship contracts based on the mother’s and father’s incomes and support obligations. Our results highlight the necessity of studying intermediate relationship contracts (i.e., between the extremes of marriage and single motherhood) to improve our understanding of potential risk groups among the rising number of children growing up outside of marriage.

Forced displacement as a consequence of wars, civil conflicts, or natural disasters does not only have contemporaneous consequences but also long-run repercussions. This eclectic overview summarizes some recent research on forced displacement in economic history. While many of the episodes covered refer to Europe, this survey points to literature across all continents. It highlights new developments, and points to gaps in the literature.

We study the impact of asylum waiting, exploiting a rapid increase in processing times for asylum seekers to Sweden. Longer waiting slows down integration. Accumulated earnings during the first four years after application are 2.3 percent lower per added month of waiting. The impact is due to delay rather than negative effects of waiting per se. There is no evidence of detrimental effects on psychiatric or other forms of health. From the date of asylum, those who have waited longer perform better in the labor market and are more likely to start advanced language training and labor market programs.

This study combines an administrative dataset of the full population of Turkish firms and the setting of the sudden mass migration of Syrian refugees to Turkey to identify the effect of migrants on firm performance and market structure. We find that economic activity increases in hosting regions, but negative implications exist for long-term productivity. As a result of the migrant shock, exiting firms expand and new firms are established; however, the resulting market structure shows less concentration. Quantitatively, a 10 percentage-point rise in the migrant-to-native ratio increases firm sales by 3.8% and the number of active firms by 5.8%, but reduces firms’ average market share by 4.1%. We further document an increase in the export volume and variety of exported products to the Middle East and North Africa (MENA) region. In addition, a decline in export prices is observed, implying a rise in the competitiveness of exporting firms. We also uncover evidence for an effect of migrants’ skills and networks on exports, as the export value and variety of products to the MENA region increase more than those to the EU region while the prices of products exported to the two regions show similar changes.

The past several decades have witnessed a rebirth of global labor mobility. Workers have begun to move between countries at rates not seen since before World War One. During the same period, economists’ study of international migration has been framed by a particular textbook model of location choice. This paper reviews the evidence on the economic causes and eects of global migration during the past half century. That evidence falsies most of the core predictions of the old model. The economics of migration will regain vitality and relevance by discarding and replacing its outworn paradigm.

We analyze how economic conditions at the time of arrival affect the economic integration of family-sponsored migrants in the U.S. Our identification strategy exploits long waiting times for family-sponsored immigration visas that decouple the migration decision from economic conditions at the time of arrival. A one pp higher unemployment rate at arrival decreases annual wage income by four percent in the short run and two percent in the longer run. The loss in wage income is the result of substantial occupational downgrading, lower hourly wages, and a reduction in working hours. Family migrants who immigrate into a recession draw on migrant and family networks to mitigate the negative labor market effects. As a result, they take up occupations with higher concentrations of fellow countrypeople. They are also more likely to reside with family members, potentially reducing their geographical mobility.

Turkey hosts the highest number of refugees in the world. The arrival of Syrian refugees has significantly changed the relative abundance of different skill groups in Turkey and the labor market conditions. This paper examines how this massive refugee influx affects native working-age children’s school enrollment and employment outcomes using a difference-in-differences IV methodology. We find that employment of both boys and girls falls substantially, but a large fraction of this fall stems from the transition of children who used to combine school and work into school only. School enrollment increases only for boys, and this is stronger for boys with more educated parents. The incidence of being neither in employment nor in education or training (NEET) increases among girls, particularly for those with less-educated parents, but not among boys. In fact, the NEET incidence drops for boys with more-educated parents.

Turkey hosts the largest population of refugees globally; however, we know little about their labor market outcomes at the national level. We use the 2018 round of the Turkey Demographic and Health Survey, which includes a representative sample of Syrian refugees in Turkey for the first time, to examine a rich set of labor market outcomes. We find that the native-refugee gap in men’s employment in Turkey (in favor of natives) is much smaller than that reported for most developed countries. Moreover, men’s employment peaks quite early (one year) after arrival and remains there, whereas women’s employment is lower to begin with and changes little over time. Once we account for demographic and educational differences, the native-refugee gap in men’s (women’s) paid employment reduces to 4.7 (4.0) percentage points (pp). These small gaps conceal the fact that refugees’ formal employment is much lower. Even after accounting for the covariates, refugee men’s formal employment rate is 58 pp lower. In addition, the native-refugee gap is the smallest in manufacturing for men and in agriculture for women, and the gap is also much smaller in wage employment than self-employment and unpaid family work for both genders. Young refugees are more likely to work than natives, whereas the gap favors natives among the prime-age working people. Moreover, the native-refugee gap in employment widens for more educated refugees. Finally, accounting for the differences in covariates, the native-refugee gap in men’s employment vanishes for Turkish-speaking refugees but persists for Arabic- and Kurdish-speaking refugees.

We study the role of firm productivity in explaining earnings disparities between immigrants and natives using population-wide matched employer-employee data from Sweden. We find substantial earnings returns to working in firms with higher persistent productivity, with greater gains for immigrants from non-Western countries. Moreover, the pass-through of within-firm productivity variation to earnings is stronger for immigrants in low-productive, immigrant-dense firms. But immigrant workers are underrepresented in high-productive firms and less likely to move up the productivity distribution. Thus, sorting into less productive firms decreases earnings in poor-performing immigrant groups that would gain the most from working in high-productive firms.

This paper studies the effects of threat on convergence to local culture and on economic assimilation of refugees, exploiting plausibly exogenous variation in their allocation across German regions between 2013 and 2016. We combine novel survey data on cultural preferences and economic outcomes of refugees with corresponding information on locals, and construct a threat index that integrates contemporaneous and historical variables. On average, refugees assimilate both culturally and economically. However, while refugees assigned to more hostile regions converge to local culture more quickly, they do not exhibit faster economic assimilation. We provide evidence consistent with the hypothesis that refugees exert more assimilation effort in response to local threat, but fail to successfully integrate because of higher discrimination by locals in more hostile regions.

Child labor is a widespread phenomenon and therefore is of interest to both researchers and policy makers. Various reasons for the existence of child labor have been proposed with the goal of designing appropriate solutions. While household poverty is viewed as the main reason for child labor, we choose to focus on the phenomenon that parents who worked during own childhood are more likely to send their children to work. We also look at the effect of social norms on the parents’ child labor decision and analyze both these effects on the supply of labor and equilibrium in the labor market. Finally, we suggest an explanation for the phenomenon of poor societies with similar income levels that differ significantly in literacy rates and propose policy improvements.

Immigration policy can have important net fiscal effects that vary by immigrants’ skill level. But mainstream methods to estimate these effects are problematic. Methods based on cash-flow accounting offer precision at the cost of bias; methods based on general equilibrium modelling address bias with limited precision and transparency. A simple adjustment greatly reduces bias in the most influential and precise estimates: conservatively accounting for capital taxes paid by the employers of immigrant labor. The adjustment is required by firms’ profit-maximizing behavior, unconnected to general equilibrium effects. Adjusted estimates of the positive net fiscal impact of average recent U.S. immigrants rise by a factor of 3.2, with a much shallower education gradient. They are positive even for an average recent immigrant with less than high school education, whose presence causes a present-value subsidy of at least $128,000 to all other taxpayers collectively.

Between 1940 and 1970, more than 4 million African Americans moved from the South to the North of the United States, during the Second Great Migration. This same period witnessed the struggle and eventual success of the civil rights movement in ending institutionalized racial discrimination. This paper shows that the Great Migration and support for civil rights are causally linked. Predicting Black inflows with a shift-share instrument, we find that the Great Migration raised support for the Democratic Party, increased Congress members’ propensity to promote civil rights legislation, and encouraged pro-civil rights activism outside the US South. We provide different pieces of evidence that support for civil rights was not confined to the Black electorate, but was also shared by segments of the white population.

It is common to rank different categories by means of preferences that are revealed through data on choices. A prominent example is the ranking of political candidates or parties using the estimated share of support each one receives in surveys or polls about political attitudes. Since these rankings are computed using estimates of the share of support rather than the true share of support, there may be considerable uncertainty concerning the true ranking of the political candidates or parties. In this paper, we consider the problem of accounting for such uncertainty by constructing confidence sets for the rank of each category. We consider both the problem of constructing marginal confidence sets for the rank of a particular category as well as simultaneous confidence sets for the ranks of all categories. A distinguishing feature of our analysis is that we exploit the multinomial structure of the data to develop confidence sets that are valid in finite samples. We additionally develop confidence sets using the bootstrap that are valid only approximately in large samples. We use our methodology to rank political parties in Australia using data from the 2019 Australian Election Survey. We find that our finite-sample confidence sets are informative across the entire ranking of political parties, even in Australian territories with few survey respondents and/or with parties that are chosen by only a small share of the survey respondents. In contrast, the bootstrap-based confidence sets may sometimes be considerably less informative. These findings motivate us to compare these methods in an empirically-driven simulation study, in which we conclude that our finite-sample confidence sets often perform better than their large-sample, bootstrap-based counterparts, especially in settings that resemble our empirical application.

We review and interpret research on the economic and political effects of receiving asylum seekers and refugees in developed countries, with a particular focus on the 2015 European refugee protection crisis and its aftermath. In the first part of the paper, we examine the consequences of receiving asylum seekers and refugees and identify two main findings. First, the reception of refugees is unlikely to generate large direct economic effects. Both labor market and fiscal consequences for host countries are likely to be relatively modest. Second, however, the broader political processes accompanying the reception and integration of refugees may give rise to indirect yet larger economic effects. Specifically, a growing body of work suggests that the arrival of asylum seekers and refugees can fuel the rise of anti-immigrant populist parties, which may lead to the adoption of economically and politically isolationist policies. Yet, these political effects are not inevitable and occur only under certain conditions. In the second part of the paper, we discuss the conditions under which these effects are less likely to occur. We argue that refugees’ effective integration along relevant linguistic, economic, and legal dimensions, an allocation of asylum seekers that is perceived as ‘fair’ by the host society, and meaningful contact between locals and newly arrived refugees have the potential to mitigate the political and indirect economic risks.

This paper contributes to the existing literature by extending Chiswick and Miller’s (2001) model to include socioemotional skills. While the theoretical model predicts that exposure, efficiency, and incentives determine language proficiency, we additionally assume that socioemotional skills influence these three constructs and thereby language proficiency. Specifically, we seek to answer the following research questions: How do socioemotional skills affect the language attainment of recent refugees? What is the relative importance of socioemotional skills in refugees’ language learning process? Given the findings of the prior literature that personality traits may compensate for socioeconomic adversity (e.g. Damian et al. 2015), we further ask whether socioemotional skills may compensate for refugees’ resource disadvantages. Empirically, we rely on growth curve models and recent longitudinal data from the IAB-BAMF-SOEP Refugee Sample.

As wages in migrant sending countries catch up with those in destinations, migrants adjust on several margins, including their duration of stay, the number of migrations they undertake, as well as the amount saved while abroad. This paper combines Mexican and U.S. data to estimate a dynamic model of consumption, emigration and re-migration, accounting for financial constraints. An increase in Mexican household earnings shortens migration duration, but raises the number of trips per migrant. For lower-income migrants, a rise in Mexican wages leads to a more than proportional effect on consumption expenditure in Mexico, arising from repatriated savings.

Between 1940 and 1970, more than 4 million African Americans moved from the South to the North of the United States, during the Second Great Migration. This same period witnessed the struggle and eventual success of the civil rights movement in ending institutionalized racial discrimination. This paper shows that the Great Migration and support for civil rights are causally linked. Predicting Black inflows with a shift-share instrument, we find that the Great Migration raised support for the Democratic Party, increased Congress members’ propensity to promote civil rights legislation, and encouraged pro-civil rights activism outside the US South. We provide different pieces of evidence that support for civil rights was not confined to the Black electorate, but was also shared by segments of the white population.

We investigate the effect of job loss and unemployment benefits on crime, exploiting unique individual-level data on the universe of workers and criminal cases in Brazil over the 2009-2017 period. We find that the probability of criminal prosecution increases on average by 23% for workers displaced upon mass layoffs, and by slightly less for their cohabiting sons. Using causal forests, we show that the effect is driven entirely by young and low tenure workers, while there is no heterogeneity by education and income. Regression discontinuity estimates indicate that unemployment benefit eligibility completely offsets potential crime increases upon job loss, but this effect completely vanishes immediately after benefit expiration. Our findings point at liquidity constraints and psychological stress as main drivers of criminal behavior upon job loss, while substitution between time on the job and leisure does not seem to play an important role.

We estimate impacts of male job loss, female job loss, and male unemployment benefits on domestic violence in Brazil. We merge employer-employee and social welfare registers with administrative data on domestic violence cases brought to criminal courts, use of public shelters by victims, and mandatory notifications of domestic violence by health providers. Leveraging mass layoffs for identification, we first show that both male and female job loss, independently, lead to large and pervasive increases in domestic violence. Exploiting a regression discontinuity design, we then show that unemployment benefits do not reduce domestic violence while benefits are being paid, and that they lead to higher domestic violence once benefits expire. These findings can be explained by the negative income shock brought by job loss and by increased exposure of victims to perpetrators, as partners tend to spend more time together after displacement. Although unemployment benefits partially offset the income drop following job loss, they reinforce the exposure shock as they increase unemployment duration.

This paper examines how the COVID-19 pandemic affected female employment in Japan. Our estimates indicate that the employment rate of married women with children decreased by 4 percentage points, while that of those without children decreased by only 1 percentage point, implying that increased childcare responsibilities caused a sharp decline in mothers’ employment. Further, mothers who left or lost their jobs appear to have dropped out of the labor force even several months after school reopening. In contrast to women, the employment rate of married men with children was not affected, which hindered progress in narrowing the employment gender gap.

In this paper, we show that the wage assimilation of immigrants is the result of the intricate interplay between individual skill accumulation and dynamic equilibrium effects in the labor market. When immigrants and natives are imperfect substitutes, increasing immigrant inflows widen the wage gap between them. Using a simple production function framework, we show that this labor market competition channel can explain about one quarter of the large increase in the average immigrant-native wage gap in the United States between the 1960s and 1990s arrival cohorts. Once competition effects and compositional changes in education and region of origin are accounted for, we find that the unobservable skills of newly arriving immigrants increased over time rather than decreased as traditionally argued in the literature. We corroborate this finding by documenting closely matching patterns for immigrants’ English language proficiency.

Migration has long been considered one of the key mechanisms through which labor markets adjust to economic shocks. In this paper, we analyze the migration response of American workers to two of the most important shocks that hit US manufacturing since the late 1990s – Chinese import competition and the introduction of industrial robots. Exploiting plausibly exogenous variation in exposure across US local labor markets over time, we show that robots caused a sizable reduction in population size, while Chinese imports did not. We rationalize these results in two steps. First, we provide evidence that negative employment spillovers outside manufacturing, caused by robots but not by Chinese imports, are an important mechanism for the different migration responses triggered by the two shocks. Next, we present a model where workers are geographically mobile and compete with either machines or foreign labor in the completion of tasks. The model highlights that two key dimensions along which the shocks differ – the cost savings they provide and the degree of complementarity between directly and indirectly exposed industries – can explain their disparate employment effects outside manufacturing and, in turn, the differential migration response.

We test the predictions of different classic migration theories by using incentivized laboratory experiments to investigate how potential migrants decide between working in different destinations. We test theories of income maximization, migrant skill-selection, and multidestination choice as we vary migration costs, liquidity constraints, risk, social benefits, and incomplete information. We show the standard income maximization model of migration with selection on observed and unobserved skills leads to a much higher migration rate and more negative skill-selection than is obtained when migration decisions take place under more realistic assumptions. Second, we investigate whether the independence of irrelevant alternatives (IIA) assumption holds. We find it holds for most people when decisions just involve wages, costs, and liquidity constraints. However, once we add a risk of unemployment and incomplete information, IIA no longer holds for about 20 percent of our sample.

Ethnic religious organizations are often blamed for slowing down immigrants’ assimilation in host societies. This paper offers the first systematic evidence on this topic by focusing on Italian Catholic churches in the US between 1890 and 1920, when four million Italians had moved to America, and anti-Catholic sentiments were widespread. Relying on newly collected data on the presence of Italian Catholic churches across counties over time, we implement a difference-in-differences design. We find that Italian churches reduced the social assimilation of Italian immigrants, lowering intermarriage, residential integration, and naturalization rates. We provide evidence that both stronger coordination within the Italian community and negative stereotyping among natives can explain these effects. Yet, Italian churches had ambiguous effects on immigrants’ economic outcomes, and increased literacy and ability to speak English among Italian children.

We review the growing literature on the political economy of immigration. First, we discuss the effects of immigration on a wide range of political and social outcomes. The existing evidence suggests that immigrants often, but not always, trigger backlash, increasing support for anti-immigrant parties and lowering preferences for redistribution and diversity among natives. Next, we unpack the channels behind the political effects of immigration. While completely separating economic from non-economic forces is impossible, we conclude that the latter are more important than the former. In examining the mechanisms, we highlight mediating factors – such as (mis-)perceptions, the media, and the conditions under which inter-group contact occurs – that can influence natives’ reactions in different directions. Throughout the review, we outline promising avenues for future research.

This paper examines the impact of massive refugee inflows on the internal mobility of the host’s country population. We rely on panel data from before and after the Syrian war and exploit the geographical distribution of Syrians across Jordanian subdistricts. Using Difference-in-Differences, we find that the Syrian inflows increased Jordanian residential mobility. In particular, native outflows of the camp hosting areas increased by 27%. The increased residential mobility out of the camp areas seems to be triggered by an increase in rents and a crowding out of Jordanian students by Syrians in schools. Our results also show that the Syrian presence increased Jordanians’ job location mobility into the camp areas. These findings are robust to controlling for refugees’ locational sorting using instrumental variables, while auxiliary placebo regressions confirm that pre-existing trends in outcomes are not driving the results. We also provide a thorough discussion on the impact of refugees versus broader impacts of the Syrian war.

This paper studies outcomes for workers moving from a poor to a rich economy employing a job tasks based approach. It uses a data case, whereby a worker could decide to work in a richer economy and place himself there by a daily or weekly commute. This set-up faciliates the disentanglement of income differences motives from a plethora of other motives. Thus it eschews the bias inherent in many studies. The paper emphasizes the idea that tasks are tied to locations, and workers choose a location-task-wage ‘pack.’ The task demanded, which is a bundle of skills, constrains human capital returns for movers. Relatively low task returns generate a substantial offset to the productivity gain for migrants, stemming from the rich economy having higher TFP and capital.

Wage gaps between documented (including natives) and undocumented workers reflect employer exploitation, endogenous occupational sorting and productivity losses associated with lack of legal status. Identification of the productivity penalty is crucial to estimate the net economic gains from legalization. Our paper presents a model-based strategy to identify the productivity penalty associated with lack of legal status. In the model, heterogeneous workers choose occupations and undocumented workers are subject to employer discrimination and experience productivity loss in occupations characterized by tasks that require legal status. The theoretical analysis provides guidance on how to identify occupational barriers and on how to compute a lower bound for the undocumented productivity penalty. Applying this strategy to individual-level data that imputes undocumented status, we estimate that the productivity penalty associated with lack of legal status in the United States is at least 5%. This implies that legalization of undocumented workers not only improves their wages, but also increases GDP

In this paper, we estimate the effects of mandatory military service by exploiting the post-cold war decrease in the need for soldiers causing a substantial number of potential conscripts not to be drafted into the German military. Specifically, using previously unavailable information on degree of fitness in the military’s medical exam as a control variable, we test for the effects of mandatory military service on wages; employment; marriage/partnership status; and satisfaction with work, financial situation, health, family life, friends, and life in general. We find almost no statistically significant effects of this 6 to 9 month career interruption for young German men, with the exception of hourly wage, which shows a negative point estimate of -15 percent with a large confidence interval of between -30 and -0.2 percent. This interval estimate is consistent with previous findings for the United States, Denmark, and the Netherlands.

Rural areas in sub-Saharan Africa are typically underserved by financial services. We measure the economic impact of introducing mobile money for the first time in rural villages of Mozambique using a randomized control trial. This intervention led to consumption smoothing through increased transfers as a response to both geo-referenced village-level floods and household-level idiosyncratic shocks. Importantly, we find that the availability of mobile money increased migration out of rural areas, where we observe lower agricultural activity and investment. Our work illustrates how financial inclusion can accelerate African urbanization and structural change while improving welfare in rural areas.

The COVID-19 pandemic has resulted in border closures in many countries and a sharp reduction in overall international mobility. However, this disruption of legal pathways to migration has raised concerns that potential migrants may turn to irregular migration routes as a substitute. We examine how the pandemic has changed intentions to migrate from The Gambia, the country with the highest pre-pandemic per-capita irregular migration rates in Africa. We use a large-scale panel survey conducted in 2019 and 2020 to compare changes in intentions to migrate to Europe and to neighboring Senegal. We find the pandemic has reduced the intention to migrate to both destinations, with approximately one-third of young males expressing less intention to migrate. The largest reductions in migration intentions are for individuals who were unsure of their intent pre-pandemic, and for poorer individuals who are no longer able to afford the costs of migrating at a time when these costs have increased and their remittance income has fallen. We also introduce the methodology of priming experiments to the study of migration intentions, by randomly varying the salience of the COVID-19 pandemic before eliciting intentions to migrate. We find no impact of this added salience, which appears to be because knowledge of the virus, while imperfect, was already enough to inform migration decisions. Nevertheless, despite these decreases in intentions, the overall desire to migrate the backway to Europe remains high, highlighting the need for legal migration pathways to support migrants and divert them from the risks of backway migration.

This study examines whether the perception of difference in institutional quality between OECD destination countries and Vietnam, and the stated importance attached to such difference, influences Vietnamese migrants’ intention to return home. We use data from a web-based survey (N = 159) that we conducted in 2016. The countries covered capture about 90% of the Vietnamese diaspora in the world. We find, by means of weighted logistic regression analysis with a range of measures of institutional quality, that migrants who perceive a larger institutional quality difference are less likely to have the intention to return. However, there is considerable heterogeneity by gender. Women are, if they attach importance to institutional quality, particularly concerned about control of corruption, while the between-country difference in government effectiveness and regulatory quality matters to men. Concerns about a lack of voice & accountability; and about political instability & the presence of violence/terrorism deter return migration of both genders.

Despite lower social class origins, children of immigrants in the UK are now attaining high levels of education. However, they experience poorer labour market outcomes, often attributed in part to disadvantaged origins. This paper engages with this paradox. We posit two potential mechanisms for second-generation educational success—social class misallocation and immigrant advantage—and discuss how far these sources of advantage might be replicated in labour market outcomes. We substantiate our discussion with empirical analyses. Drawing on a unique longitudinal study of England and Wales spanning 40 years and encompassing one percent of the population, we present new evidence on the educational and occupational social mobility of men and women from four immigrant-origin groups and the white British majority. We demonstrate that ethnic minorities’ educational advantage is only partially reflected in the labour market. We reflect on the implications of our findings for research on ‘ethnic penalties’ and social mobility.

A number of recent works have shown that the substantial increase in imports to the United States from China over recent decades led to large but highly concentrated negative labor market outcomes for those workers most exposed to these imports. On the other hand, such substantially negative effects were largely absent in Germany, the world’s fourth-largest economy. This paper discusses aspects that likely contribute to explaining these differences: the German industry structure, its nature of industrial relations, as well as the ability to and willingness of workers to retrain. Moreover, with the China shock being in large part over, any future shocks will most likely look quite different. It is unlikely that the economic shocks of the future will affect the same workers, in the same ways, as the China shock did. Therefore, by focusing the policy discussion on trade policy exclusively, we may overlook other looming challenges. Instead, it may be more fruitful to discuss how to design industrial policies, labor market policies, and education and training policies so that modern economies can adapt flexibly to a range of possible shocks.

This paper develops and estimates a dynamic model where individuals differ in ability and location preference to evaluate the mechanisms that affect the evolution of immigrants’ careers in conjunction with their re-migration plans. Our analysis highlights a novel form of selective return migration where those who plan to stay longer invest more into skill acquisition, with important implications for the assessment of immigrants’ career paths and the estimation of their earnings profiles. Our study also explains the willingness of immigrants to accept jobs at wages that seem unacceptable to natives. Finally, our model provides important insight for the design of migration policies, showing that policies which initially restrict residence or condition residence on achievement shape not only immigrants’ career profiles through their impact on human capital investment but also determine the selection of arrivals and leavers.

Higher price levels in the destination relative to the origin increase the effective real wages of immigrants, thereby affecting immigrants’ reservation and entry wages as well as their subsequent career trajectories. Based on micro-level longitudinal administrative data from Germany and exploiting within-country and across-cohort variations in the real exchange rate (RER) between Germany and countries that newly joined the European Union in the 2000s, we find that immigrants arriving with high RERs initially settle for lower paying jobs than comparable immigrants arriving with low RERs. In subsequent periods, however, wages of high RER arrivals catch up to that of their low RER counterparts, convergence achieved primarily through changes to better paying occupations and firms. Our findings thus point to the persistent regional price differences as one possible reason for immigrants’ downgrading, with implications for immigrants’ career profiles and the assessment of labor market impacts of immigration.

A number of factors contribute to interstate conflicts. One social element that has received little attention in the literature is the role of international migration. At the same time, the contribution of climate stress on interstate disputes has been underresearched. This paper analyses if climate stress represents a direct driver of interstate disputes and, at the same time, an indirect driver to conflicts through its effect on international migration. To do so, we use climate shocks to instrument for migration flows in a gravity setting in order to study its causal effect on international conflict. We find that a 1% increase in climate-induced migration increases the probability that the destination of the flows initiates conflict against the origin by 0.001 percentage points over a mean incidence of conflict of 0.13 percentage point per year. The results are consistent across different migration datasets and different specifications of defining the initiator in the conflict.

We study the role of institutions in affecting the labor market impacts of immigration using a cross-country meta-analysis approach. To accomplish this, we gather information on 1,030 previously estimated wage effects and 432 employment effects of immigration from 61 academic studies covering 18 developed countries. The mean and median impact on the relative wage of directly exposed native workers are negative and significantly different from the small positive mean and median impact on the average wage level. This pattern is reversed for employment effects where the magnitudes are smaller. We combine this database with country-level data on labor market institutions from the OECD. The results suggest that institutions may shield native workers from distributional (relative) wage consequences of immigration but exacerbate the impacts on average wages in the economy. We do not detect a significant and robust association for the employment effects of foreign workers.

Criteria used in hiring workers often do not reflect the skills required on the job. By comparing trainee performance for newly hired workers conditional on competitive civil service examination scores for hiring French public sector workers, we test whether women and men with the same civil service examination score exhibit similar performance in a job-related trainee programme. Both the civil service examination and trainee scores contain anonymous and non-anonymous components that we observe separately. We find that by the end of the trainee programme (first year of employment), women are outperforming men on both anonymous written and non-anonymous oral evaluations, a finding that holds both conditionally and unconditionally for the civil service examination results. According to further analysis, however, it is the anonymously graded “essay on common culture” civil service examination that, unlike the other CSE components, disadvantages women in this particular context.

We study the role of professional networks in facilitating the escape of persecuted academics from Nazi Germany. From 1933, the Nazi regime started to dismiss academics of Jewish origin from their positions. The timing of dismissals created individual-level exogenous variation in the timing of emigration from Nazi Germany, allowing us to estimate the causal effect of networks for emigration decisions. Academics with ties to more colleagues who had emigrated in 1933 or 1934 (early émigrés) were more likely to emigrate. The early émigrés functioned as “bridging nodes” that helped other academics cross over to their destination. Furthermore, we provide some of the rst empirical evidence of decay in social ties over time. The strength of ties also decays across space, even within cities. Finally, for high-skilled migrants, professional networks are more important than community networks.

We evaluate a Danish reform focused on improving Danish language training for those granted refugee status on or after January 1, 1999. Using a Regression Discontinuity Design we find a significant, permanent, positive effect on earnings. This effect emerged after completion of language classes and was accompanied by additional schooling and higher probability of working in communication-intensive jobs, suggesting that language training, rather than other minor aspects of the reform, produced it. We also find evidence of higher completion rates of lower secondary school and lower probability of crime for male children with both parents exposed to the reform.

It is assumed that not only will more highly educated migrants do better in the receiving country labour market, but also that those who are relatively more educated compared to their compatriots, that is who are ‘selected’, will bring additional forms of human and social capital associated with economic success. Given the lack of information on these traits in most datasets, this assumption has not yet been comprehensively tested. Combining information on usually unobserved labour market relevant skills and characteristics with measures of educational selection and labour market outcomes of the foreign born in the UK, we do not find that educational selection is systematically associated with better cognitive or non-cognitive skills, health or social network composition. For more elite migration streams, educational selectivity is negatively associated with skills. As a result, higher selection does not translate into better labour market outcomes net of education. We argue that while higher bars to migration may increase the absolute skill level of migrants, it may also exclude those with (usually unobserved) favourable labour market characteristics who lack social and financial capital, reinforcing transnational class reproduction rather than selecting for the brightest and the best.

This paper analyzes the effect of immigration on gender gaps in the labor market. Using an equilibrium structural model for the U.S. economy, I simulate the importance of two mechanisms: the differential labor market competition induced by immigration on male and female workers, and the availability of cheaper child care services. Consistent with the literature, aggregate effects on gender and participation gaps are negligible. However, female are more negatively affected by labor market competition, even though these effects are compensated from the cheaper-childcare effect. This generates heterogeneity in the effects along the skill distribution: gender gaps are increased at the bottom of the distribution and reduced at the top. Human capital adjustments are also heterogeneous.

We provide a first timely assessment of the pandemic crisis impact on the labour market prospects of immigrant workers in Europe by proposing a novel measure of their exposure to employment risk. We characterize migrants' occupations along four dimensions related to the role of workers' occupations in the response to the pandemic, the contractual protection they enjoy, the possibility of performing their job from home and the resilience of the industry in which they are employed. We show that our measure of employment risk closely predicts actual employment losses observed in European countries after the first wave of the COVID-19 pandemic. We estimate that, within industries and occupations, Extra-EU migrants and women are exposed to higher risk of unemployment than native men and that women are losing jobs at higher rates than equally exposed men. According to our estimates, more than 9 million immigrants in the EU14+UK area are exposed to a high risk of becoming unemployed due to the pandemic crisis, 1.3 million of which are facing a very high risk.

We study the causal effect of local labor market conditions and attitudes towards immigrants at the time of arrival on refugees’ multi-dimensional integration outcomes (economic, linguistic, navigational, political, psychological, and social). Using a unique dataset on refugees, we leverage a centralized allocation policy in Germany where refugees were exogenously assigned to live in specific counties. We find that high initial local unemployment negatively affects refugees’ economic and social integration: they are less likely to be in education or employment and they earn less. We also show that favorable attitudes towards immigrants promote refugees’ economic and social integration. The results suggest that attitudes toward immigrants are as important as local unemployment rates in shaping refugees’ integration outcomes. Using a machine learning classifier algorithm, we find that our results are driven by older people and those with secondary or tertiary education. Our findings highlight the importance of both initial economic and social conditions for facilitating refugee integration, and have implications for the design of centralized allocation policies.

Income inequality in New Zealand has been a growing concern since the 1980s. Inequality did indeed increase since then, particularly in metropolitan areas. At the same time, policies of encouraging permanent and temporary immigration led to the foreign born accounting for a growing share of the population, again particularly in metropolitan areas. This paper investigates the impact of immigration, by skill level and length of stay, on the distribution of income in urban areas. We apply, and reconcile, sub-group and Shapley-value regression decomposition methodologies to census microdata. We find that over the 1986-2013 period the inequality-increasing effects of immigration size and composition are together somewhat larger than the inequality-reducing effects of changes in the size and composition of the New Zealand born population. Additionally, changes in the skill distribution of the work force in New Zealand have been very important for changes in the distribution of income, regardless of migration status. While the sub-group decomposition of inequality change yields qualitatively similar contributions to 1986-2013 change as regression decomposition, the numerical effects differ markedly between the two methodologies.

This paper considers the role of school closures in the spread of the SARS-CoV-2 virus. To isolate the impact of the closures from other containment measures and identify a causal effect, we exploit variation in the start and end dates of the summer school and fall holiday across the 16 federal states in Germany. Leveraging a difference-in-differences design with staggered adoption, we show that neither the summer closures nor the closures in the fall have had any significant containing effect on the spread of SARS-CoV-2 among children or any spill-over effect on older generations. We also do not find any evidence that the return to school at full capacity after the summer holidays increased infections among children or adults. Instead, we find the number of children infected increased during the last weeks of the summer holiday and decreased in the first weeks after schools reopen, a pattern we attribute to travel returnees and increased testing.

The way we collectively discuss migration shapes citizens’ perceptions of migrants and their influence on our society. This paper investigates whether a narrative about the positive impact of immigrants on the hosting economy affects natives’ behaviour towards migrants. To shed light on the underlying mechanism, we present a simple theoretical framework that models the relationship between beliefs, attitude and behaviour and identifies the sequential channels through which a narrative might be useful in changing attitude and behaviour. We test its predictions through an online survey experiment, where we deliver UK natives a favourable narrative about migrants. Treated subjects revise their beliefs about migrants and exhibit significantly more positive self-reported attitudes and more pro-migrant behaviour. Moreover, they update beliefs in a way that gives support to the existence of confirmation bias.

Does the culture in which a woman grows up influence her labor market decisions once she has had a child? To what extent might the culture of her present social environment shape maternal labor supply? To address these questions, we exploit the setting of German reunification. A state socialist country, East Germany strongly encouraged mothers to participate in the labor market full-time, whereas West Germany propagated a more traditional male breadwinner-model. After reunification, these two cultures were suddenly thrown together, with consequent increased social interactions between East and West Germans through migration and commuting. A comparison of East and West German mothers on both sides of the former Inner German border within the same commuting zone shows that culture matters. Indeed, East German mothers return to work more quickly and for longer hours than West German mothers even two decades after reunification. Second, in exploiting migration across this old border, we document a strong asymmetry in the persistence of the culture in which women were raised. Whereas East German female migrants return to work earlier and work longer hours than their West German colleagues even after long exposure to the more traditional West German culture, West German migrants adjust their post-birth labor supply behavior nearly entirely to that of their East German colleagues. Finally, taking advantage of differential inflows of East German migrants across West German firms in the aftermath of reunification, we show that even a partial exposure to East German colleagues induces “native” West German mothers to accelerate their return to work after childbirth, suggesting that migration might be a catalyst for cultural change.

This paper leverages spatial and time-series variation in the population age structure of Italian regions to uncover the causal effect of demographic shifts on labour productivity. Such effect is analysed along a ‘first-order’ channel stemming from the direct relation between an individual’s age and productivity, and a ‘second-order’ channel that captures the productivity implications of a more or less dispersed age distribution. We propose an estimation framework that relates labour productivity to the entire age distribution of the working-age population and employs instrumental variable techniques to address endogeneity issues. The estimates return a hump-shaped age-productivity profile, with a peak between 35 and 40 years, as well as a positive productivity effect associated with a more dispersed age distribution.

There were large regional differentials in the Brexit vote. Most notably, the percentage voting to leave the EU ranged from 38% in Scotland and 40% in London to 59% in the East and West Midlands. Turnout also varied across Britain, from a low of 67% in Scotland to 77% in the South East and South West. Existing empirical studies have tended to focus on the demographic composition of geographical areas to identify the key socio-economic characteristics in explaining spatial and other variations in the leave vote - with age and education found to be important drivers. We use the British Social Attitudes Survey to provide a more nuanced picture of regional differences in the Brexit vote by examining in particular the role that national identity and attitudes towards immigration played. In addition to education, we find that national identity exerted a strong influence on the probability voting leave in several English regions, including the East, North East, London and South East. Whereas, over and above this, concerns about immigration had a quantitatively large and highly significant impact in all regions bar London, and the East to a lesser extent. Differences by country of birth are also explored, with national identity and concerns about immigration having a larger impact for the English-born. Our findings are then discussed in the light of changes that have affected regional economies during the process of increased globalisation, austerity, the current Covid-19 crisis and recent UK government announcements to rebalance the economy.

Does leave-taking matter for young workers’ careers? If so, why? We propose the competition effect—relative leave status of workers affecting their relative standing inside the firm—as a new explanation. Exploiting a policy reform that exogenously assigned four-week paid paternity leave to some new fathers, we find evidence consistent with the competition effect: A worker enjoys a better post-child earnings trajectory when a larger share of his colleagues take leave because of the policy. In contrast, we find no direct earnings effect resulting from the worker’s own leave when controlling for their relative leave eligibility status within the firm.

In this paper, we study the determinants and consequences of educational and occupational aspirations. Basing our enquiry on the British NCDS 1958 cohort data, we assess the importance of aspirations for social mobility above and beyond other established determinants. We document educational and occupational inequalities in young individuals’ aspirations, whereby parental aspirations are a strong predictor of children’s aspiration-levels. While we find a positive correlation between aspirations and later achievement, we also provide evidence for reduced well-being in adulthood if aspirations in adolescence were higher than actual achievements later in life.

We estimate month-of-birth effects on cognitive and noncognitive skills, as well as factors relevant to skill formation. Our estimates indicate that younger students in a given grade cohort have lower cognitive and noncognitive skills. To shed light on the underlying mechanisms, we also examine children’s time use and interpersonal relationships. We find evidence of compensatory investment in cognitive skills by younger children, however, they are also more likely to have poor-quality relationships with their classmates and teachers, which may harm the long-term development of noncognitive skills. Our findings on skill formation have implications for efficiency and equity.

While economic theory suggests substitutability between labor and capital, little evidence exists regarding the causal effect of labor supply on inventing labor-saving technologies. We analyze the impact of exogenous changes in regional labor supply on automation innovation by exploiting an immigrant placement policy in Germany during the 1990s and 2000s. Difference-in-differences estimates indicate that one additional worker per 1,000 manual and unskilled workers reduces automation innovation by 0.05 patents. The effect is most pronounced two years after immigration and confined to industries containing many low-skilled workers. Labor market tightness and external demand are plausible mechanisms for the labor-innovation nexus.

We examine worker effort as a potential margin of adjustment to a minimum wage hike using unique data on piece rate workers who perform a homogenous task and whose individual output is rigorously recorded. By employing a difference-in-differences strategy that exploits the increase in Florida’s minimum wage from $6.79 to $7.21 on January 1, 2009, and worker location on the pre-2009 productivity distribution, we provide evidence consistent with incumbent workers’ positive effort responses.

The Covid-19 pandemic has disrupted working life in many ways, the negative consequences of which may be distributed unevenly under lockdown regulations. In this paper, we construct a new set of pandemic-related indices from the Occupational Information Network (O*NET) using factor analysis. The indices capture two key dimensions of job task requirements: (i) the extent to which jobs can be adaptable to work from home; and (ii) the degree of infection risk at workplace. The interaction of these two dimensions help identify which groups of workers are more vulnerable to income losses, and which groups of occupations pose more risk to public health. This information is crucial for both designing appropriate supporting programs and finding a strategy to reopen the economy while controlling the spread of the virus. In our application, we map the indices to the labor force survey of a developing country, Thailand, to analyze these new labor market risks. We document differences in job characteristics across income groups, at both individual and household levels. First, low income individuals tend to work in occupations that require less physical interaction (lower risk of infection) but are less adaptable to work from home (higher risk of income/job loss) than high income people. Second, the positive occupational sorting among low-income couples amplifies these differences at the household level. Consequently, low-income families tend to face a disproportionately larger risk of income/job loss from lockdown measures. In addition, the different exposure to infection and income risks between income groups can play an important role in shaping up the timing and optimal strategies to unlock the economy.

The Arab population in Israel constitutes an ethnic minority, at around 20% of the population. The economy of this minority is characterized by inferior outcomes relative to the Jewish majority by all indicators, including employment, wages, occupational status, social welfare, education, and housing. This paper reviews key data facts and presents a model of barriers to integration facing Arabs in Israel, taking it to the data. The empirical analysis, based on a general equilibrium model of occupational choice with optimizing agents and barriers, points to an increase over time in barriers to the acquisition of human capital in highly skilled occupations, and, concurrently, a reduction in labor market barriers in all occupations. The analysis offers insights relevant to other developed economies with large ethnic minorities.

This article investigates the medium to long-term effects on refugee labour market outcomes of the temporary employment bans being imposed in many countries on recently arrived asylum seekers. Using a newly collected dataset covering almost 30 years of employment restrictions together with individual data for refugees entering European countries between 1985 and 2012, our empirical strategy exploits the geographical and temporal variation in employment bans generated by staggered introduction and removal coupled with frequent changes at the intensive margin. We find that exposure to a ban at arrival reduces refugee employment probability in post-ban years by 15%, an impact driven primarily by lower labour market participation. These effects are not mechanical, since we exclude refugees who may still be subject to employment restrictions, are non-linear in ban length, confirming that the very first months following arrival play a key role in shaping integration prospects, and last up to 10 years post arrival. We further demonstrate that the detrimental effects of employment bans are concentrated among less educated refugees, translate into lower occupational quality, and seem not to be driven by selective migration. Our causal estimates are robust to several identification tests accounting for the potential endogeneity of employment ban policies, including placebo analysis of non-refugee migrants and an instrumental variable strategy. To illustrate the costs of these employment restrictions, we estimate a EUR 37.6 billion output loss from the bans imposed on asylum seekers who arrived in Europe during the so-called 2015 refugee crisis.

This paper studies the relationship between past immigration experiences of the host country and the way new immigrants enter the labor market. We focus on two countries—Finland and Sweden—that have similar formal institutions but starkly different immigration histories. In both countries, immigrants tend to find their first jobs in low-paying establishments, where the manager and colleagues share their ethnic background. The associations between background characteristics, time to first job, other entry job characteristics, earnings dynamics and job stability are also remarkably similar. These results are consistent with the hypothesis that the host country’s immigration history plays a limited role in shaping the integration process.

It is often desired to rank different populations according to the value of some feature of each population. For example, it may be desired to rank neighborhoods according to some measure of intergenerational mobility or countries according to some measure of academic achievement. These rankings are invariably computed using estimates rather than the true values of these features. As a result, there may be considerable uncertainty concerning the rank of each population. In this paper, we consider the problem of accounting for such uncertainty by constructing confidence sets for the rank of each population. We consider both the problem of constructing marginal confidence sets for the rank of a particular population as well as simultaneous confidence sets for the ranks of all populations. We show how to construct such confidence sets under weak assumptions. An important feature of all of our constructions is that they remain computationally feasible even when the number of populations is very large. We apply our theoretical results to re-examine the rankings of both neighborhoods in the United States in terms of intergenerational mobility and developed countries in terms of academic achievement. The conclusions about which countries do best and worst at reading, math, and science are fairly robust to accounting for uncertainty. By comparison, several celebrated findings about intergenerational mobility in the United states are not robust to taking uncertainty into account.

In this paper, we investigate the wage, employment and reallocation effects of the introduction of a nationwide minimum wage in Germany that affected 15% of all employees. Based on identification designs that exploit variation in exposure across individuals and regions, we find that the minimum wage raised wages, but did not lower employment. At the same time, the minimum wage lead to reallocation effects. At the individual level, the minimum wage induced low wage workers (but not high wage workers) to move from small, low paying firms to larger, higher paying firms. This worker upgrading to better firms can account for up to 25% of the wage increase induced by the minimum wage. Moreover, at the regional level, average firm quality (measured as firm size or fixed firm wage effect) increased in more affected regions in the years following the introduction of the minimum wage.

This paper studies the consequences of an increased presence of immigrants in the workplace on anti-immigration voting behavior by combining detailed Swedish workplace data with election outcomes for a large anti-immigration party (the Sweden Democrats). At each election precinct, we match the election outcomes with the share of non-European co-workers among the average native-born worker for three consecutive elections between 2006 and 2014. Using a fixed effects approach, we estimate a negative effect of an increased share of non-Europeans in the workplace on support for the Sweden Democrats: a one standard deviation increase in the average share of non-European co-workers decreases the precinct vote share for the Sweden Democrats by roughly 0.4 percentage points. We show that these results are solely driven by within-skill contact, and by contact within occupations that are less exposed to job loss. We interpret the results as supporting the contact hypothesis: that increased interactions with minorities r duce prejudice among native-born voters, which leads to lower support for anti-immigration parties.

We investigate the long-term consequences of mass refugee inflow on economic develop-ment. After the Greco-Turkish war of 1919–1922, 1.2 million Greek Orthodox were forciblyresettled from Turkey to Greece, increasing the host population by more than 20% within afew months. To examine the long-term effects of this event, we build a novel geocoded datasetlocating refugee settlements across the universe of more than four thousand Greek municipali-ties that existed in 1920. Using a battery of empirical strategies relying on different margins ofspatial and temporal variation in the refugee inflow, we find that localities with a greater shareof Greek refugees in 1923 display higher level of prosperity and industrialization sixty yearsafter the event. These long-run benefits of refugees appear to be driven by the provision of newagricultural know-how and the transfer of technological knowledge in textile, which fosteredgrowth through higher diversity in complementary skills. The economic gains of the resettle-ment were lower in places where refugees were clustered in separate enclaves and where theirskills were less easily transferable due to local geographic conditions.

We estimate the impact of state-level \E-Verify" legislation that mandates employment eligibility verification for private-sector workers. We document declines in formal sector employment and employment turnover after mandate passage, with eects concentrated among those likeliest to be work-ineligible. Using newly available data, we show that larger firms are far more likely to comply with mandates. Heterogeneity in adherence leads to substantial within-state employment spillovers from larger to smaller firms, as well as a reduction in the number of large firms. We find no evidence that work-ineligible populations relocate or that native-born workers' labor market outcomes improve in response to mandates.

What is the long-run impact of large negative historical events on the individual decision to migrate? We investigate this research question by looking at the effect of the Great Irish Famine (1845-1850) on the long-run individual decision to migrate to the US during the Age of the Mass Migration. We construct a unique dataset based on two early 20th century Irish Censuses and the Ellis Island Administrative Records. This allows us to test whether the Great Irish Famine, one of the most lethal episodes of mass starvation in history, had a long-run impact on individuals’ migration decisions. Controlling for individual and geographical characteristics, we find that the Irish Famine was a significant long-run driver of individuals’ migration choices.

How the internet affects job matching is not well understood due to a lack of data on job vacancies and quasi-experimental variation in internet use. This paper helps fill this gap using plausibly exogenous roll-out of broadband infrastructure in Norway, and comprehensive data on recruiters, vacancies and job seekers. We document that broadband expansions increased online vacancy-postings and lowered the average duration of a vacancy and the share of establishments with unfilled vacancies. These changes led to higher job-finding rates and starting wages and more stable employment relationships after an unemployment-spell. Consequently, our calculations suggest that the steady-state unemployment rate fell by as much as one-fifth.

We provide an overview of the integration of refugees into the labor markets of a number of high-income countries. Discussing the ways in which refugees and economic migrants are differently selected and so might be expected to perform differently in a host country’s labor market, we examine employment and wages for these groups over time after arrival. There is significant heterogeneity between host countries, but in general refugees experience persistently worse outcomes than other migrants. While the gaps between the groups can be seen to decrease on a timescale of a decade or two, this is more pronounced in employment rates than it is in wages. We also discuss how refugees are distinct in terms of other factors affecting integration, including health, language skills and social networks. We provide a discussion of insights for public policy in receiving countries, concluding that supporting refugees in early labor market attachment is crucial.

To what extent do early experiences in the host country shape the political integration of immigrants? We argue that the initial neighborhoods immigrants settle in establish patterns of behavior that influence subsequent political participation. Using Norwegian administrative register data, we leverage quasi-exogenous variation in the placement of refugees to assess the consequences of assignment to particular neighborhoods. We find that the dierence in turnout between refugees initially placed in 20th and 80th percentile neighborhoods is 12.6 percentage points, which represents 47 percent of the participation gap between refugees and residents. To assess the mechanism, we draw on individual level data on all neighbors present at the time of each refugees' arrival, and evaluate the relative impact of neighborhood characteristics and available social networks. Our findings suggest that while neighborhood socioeconomic factors play a limited role, early exposure to politically engaged neighbors and peer cohort increases immigrants' turnout over the long run.

We investigate the impact of robot adoption on electoral outcomes in 14 Western European countries, between 1993 and 2016. We employ both official election results at the district level and individual-level voting data, combined with party ideology scores from the Manifesto Project. We measure exposure to automation both at the regional level, based on the ex-ante industry specialization of each region, and at the individual level, based on individual characteristics and pre-sample employment patterns in the region of residence. We instrument robot adoption in each country using the pace of robot adoption in other countries. Higher exposure to robot adoption is found to increase support for nationalist and radicalright parties. Unveiling some potential transmission channels, higher robot exposure at the individual level leads to poorer perceived economic conditions andwell-being, lower satisfaction with the government and democracy, and a reduction in perceived political self-efficacy.

How does the saving behavior of immigrants respond to changes in purchasing power parity between the source and host countries? We examine this question by building a theoretical model of joint return-migration and saving decisions of temporary migrants and then test its implications by using data from the German Socioeconomic Panel on immigrants from 92 source countries. As implied by our theoretical model, we find that the saving rate increases in the price of host- in terms of source-country currency, but decreases in the source-country price level and that the absolute magnitude of both relationships increases as the time to retirement becomes shorter. At the median level of years to retirement, the absolute values of the elasticity of savings with respect to the nominal exchange rate and with respect to the source-country price level are both close to unity. Moreover, as we gradually restrict the sample to individuals with stronger return intentions, the estimated magnitudes become larger and their stastical significance higher.

We estimate the effects of the arrival of 2.5 million Syrian migrants in Turkey by the end of 2015 on the labor market outcomes of natives, using a difference-in-differences IV methodology. We show that relaxing the common-trend assumption of this methodology—unlike recent papers in the same setting—makes a substantial difference in several key outcomes. Despite the massive size of the migrant influx, no adverse effects on the average wages of men or women or on total employment of men are observed. For women, however, total employment falls—which results mainly from the elimination of part-time jobs. While the migrant influx has adverse effects on competing native workers in the informal sector, it has favorable effects on complementary workers in the formal sector. We estimate about one-to-one replacement in employment for native men in the informal sector, whereas both wage employment and wages of men in the formal sector increase. Increases in prices in the product market and in capital flow to the treatm nt regions contribute to the rise in labor demand in the formal sector.

We take advantage of a major compulsory school reform in Turkey to provide novel evidence on the causal effect of education on both the incidence and timing of internal migration. In addition, for the first time in literature, we provide causal effects of education on migration by reason for migration. We find that while education substantially increases the incidence of migration among men, there is no evidence of an effect among women. Women, however, become more likely to migrate at earlier ages and their migration reasons change. Revealing the empowering role of education, women become more likely to move for human capital investments and for employment purposes and less likely to be tied-movers.

We use a plant level survey to identify interactions between domestic plants and foreign direct investment (FDI) in Ethiopia’s manufacturing sector. Almost one third of Ethiopian plants report being linked to FDI through labor sharing, forward and backward linkages and competition in input and output markets. Domestic plant managers report that through these linkages with FDI, they learn about production processes, managerial and organizational practices and exporting. We quantify the spillovers from FDI at the local level by comparing changes in total factor productivity (TFP) among domestic plants in districts where a large greenfield foreign plant produced and districts where FDI in the same industry and around the same time was licensed but not yet operational. Over the four years starting with the year of the FDI opening, the TFP of domestic plants is 11 percent higher in treated districts, employment in these domestic plants increases and new domestic plants open.

There is a widespread policy view that a lack of job opportunities at home is a key reason for migration, accompanied by suggestions of the need to spend more on creating these opportunities so as to reduce migration. Self-employment is widespread in poor countries, and faced with a lack of existing jobs, providing more opportunities for people to start businesses is a key policy option. But empirical evidence to support this idea is slight, and economic theory offers several reasons why the self-employed may in fact be more likely to migrate. We put together panel surveys from eight countries to descriptively examine the relationship between migration and self-employment, finding that the self-employed are indeed less likely to migrate than either wage workers or the unemployed. We then analyze seven randomized experiments that increased self-employment, and find their causal impacts on migration are negative on average, but often small in magnitude.

Because accountability may improve the comparability that is compromised by lenient grading, we compare exit exam outcomes in the same schools before and after a policy change that increased teacher accountability by anchoring grading scales. In particular, using a large administrative dataset of 364,445 exit exam outcomes for 72,889 students, we assess the effect of introducing centralized scoring standards into schools with higher and lower quality peer groups. We find that implementation of these standards increases scoring differences between the two school types by about 25 percent.

Economic incentives play a key role in the decision to run for oce, but little is known on how they shape immigrants' selection into candidacy. We study this question using a two-period Roy model and show that if returns to labour market experience are higher for migrants than natives, migrants will be less likely to seek oce than natives. We empirically assess this prediction using administrative data from Norway, a country with a very liberal regime for participation in local elections. Our results strongly support our theoretical model and indicate that immigrants' political and economic integration are closely intertwined.

Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? In this paper we match data on thousands of notable individuals born in Europe between the XIth and the XIXth century with historical data on city institutions and population. Our main variable of interest is the number of famous creatives (scaled to local population) born in a city during a century, but we also look at famous immigrants (based on location of death). We first document several stylized facts: famous births and immigrants are spatially concentrated and clustered across disciplines, creative clusters are persistent but less than population, and spatial mobility has remained stable over the centuries. Next, we show that the emergence of city institutions protecting economic and political freedoms and promoting local autonomy facilitates the attraction and production of creative talent.

Social Security Disability Insurance (SSDI) take-up tends to increase during recessions despite the fact that the program is intended to insure against the possibility of a work-preventing disability, not job loss. We examine the role that social costs—such as taboos against receiving government benefits or the difficulty of obtaining information about the program within one’s social circle—play in the decision to apply for SSDI in response to changes in economic conditions. We show that immigrants from country-of-origin groups that have lower social costs to participation, as measured by past SSDI participation rates for their origin group, are more sensitive to economic downturns than immigrants from high cost groups. We present evidence that this is mainly driven by differences across origin countries in norms regarding the importance of work, rather than by information sharing or taboos against cheating the government.

While skilled immigration ceteris paribus provides an immediate boost to GDP per capita by adding to the human capital stock of the receiving economy, might it also reduce the number of 'good jobs', i.e. those with training, available to indigenous workers? This paper analyzes this issue theoretically and empirically. The theoretical model shows how skilled immigration may affect the sectoral allocation of labor and how it may have a positive or negative effect on the training and social mobility of native born workers. The empirical analysis uses UK data from 2001 to 2018 to show that training rates of UK born workers have declined in a period where immigration has been rising strongly, and have declined significantly more in high wage non-traded sectors. At the sectoral level however this link is much less strong but there is evidence of different effects of skilled immigration across traded and non-traded sectors and evidence that the hiring of UK born workers in high wage non-traded sectors has been negatively affected by skilled immigration, although this effect is not large. Taken together the theoretical and empirical analyses suggest that skilled immigration may have some role in allocating native born workers away from 'good jobs' sectors but it is unlikely to be a major driver of social mobility.

Academia and the public media have emphasized the link between STEM majors and innovation as well as the need for STEM graduates in the U.S. economy. Given the proclivity of international students to major in STEM fields, immigration policy may be used to attract and retain high-skilled STEM workers in the United States. We examine the impacts of a 2008 policy extending the Optional Practical Training (OPT) period for STEM graduates. Using data from the National Survey of College Graduates, we find that, relative to other foreign-born U.S. college graduates, the foreign-born who first came on student visas were 18 percent more likely to have their degrees in STEM fields if they enrolled in their major after the OPT policy change. While part of this increase is likely due to the rather mechanical drop in return migration among STEM graduates following the OPT change, the policy also appears to have induced some international students, who may have otherwise chosen a different field, to major in STEM.

Denmark’s Start Aid welfare reform reduced benefits to refugee immigrants by around 50 percent for those granted residency after the reform date. The reform led to a sharp short run increase in labor earnings and employment, but it also induced a strong female labor force withdrawal, and a large and persistent drop in disposable income for most households. Furthermore, the reform caused a sharp increase in property crime among both females and males. Moreover, children’s likelihood of being enrolled in childcare or preschool, their performance in language tests, and their years of education all decreased, while teenagers’ crime rates increased.

Straightforward economic arguments point to the potential for large global output gains from movement of labor from less to more productive locations. Yet the politics of receiving countries seems resistant, characterized rather by efforts to limit migration, or to stop it altogether. In this paper we examine the foundations of claims of large welfare gains through free mobility, studying implications of liberalizing migration for world welfare under a variety of models, paying attention not only to overall gains but also to how gains are distributed, and reviewing attempts to quantify the benefits. We conclude by asking how far considerations beyond economics motivate keenness to impose restrictions on migration.

We estimate the effects of receiving additional schooling before age 5 on cognitive and noncognitive outcomes, exploiting unique school entry rules in England that cause variation in the age at school entry and the effective length of the first school year, and combining survey data with administrative school records up to 6 years after exposure. We find significant effects on both cognitive and noncognitive outcomes at ages 5 and 7, particularly so for boys with a disadvantaged parental background. At age 11, effects on cognitive outcomes have disappeared, while there is still evidence for effects on noncognitive outcomes.

This study estimates the fiscal consequences of receiving refugees, over the refugees’ lifetime. It uses data from Sweden in 2015, and the calculations account for refugees’ age, years since immigration, and country of origin. The estimated average annual fiscal net contribution over the lifetime of the average refugee (58 years) ranges from –12 per cent of GDP per capita for refugees from the countries of origin for which labor market performance has historically been the strongest, to –22 per cent for those for which it has been the weakest. The estimates imply that if the European Union received all refugees currently in Asia and Africa, the implied average annual fiscal cost over the same time span would be at most 0.6 per cent of GDP.

About 1.4 million refugees and irregular migrants arrived in Europe in 2015 and 2016. We model how refugees and irregular migrants are self-selected. Using unique datasets from the International Organization for Migration and Gallup World Polls, we provide the first large-scale evidence on reasons to emigrate, and the self-selection and sorting of refugees and irregular migrants for multiple origin and destination countries. Refugees and female irregular migrants are positively self-selected with respect to education, while male irregular migrants are not. We also find that both male and female migrants from major conflict countries are positively self-selected in terms of their predicted income. For countries with minor or no conflict, migrant and non-migrant men do not differ in terms of their income distribution. We also analyze how border controls affect destination country choice.

In this paper, we analyze how the formal recognition of immigrants’ foreign occupational qualifications affects their subsequent labor market outcomes. The empirical analysis is based on a novel German data set that links respondents’ survey information to their administrative records, allowing us to observe immigrants at monthly intervals before, during and after their application for occupational recognition. Our findings show substantial employment and wage gains from occupational recognition. After three years, the full recognition of immigrants’ foreign qualifications increases their employment rates by 24.5 percentage points and raises their hourly wages by 19.8 percent relative to immigrants without recognition. We show that the increase in employment is largely driven by a higher propensity to work in regulated occupations. Relating our findings to the economic assimilation of immigrants in Germany, we further document that occupational recognition leads to substantially faster convergence of immigrants’ earnings to those of their native counterparts.

If individuals become aware of their stereotypes, do they change their behavior? We study this question in the context of teachers’ bias in grading immigrants and native children in middle schools. Teachers give lower grades to immigrant students compared to natives who have the same performance on standardized, blindly-graded tests. We then relate differences in grading to teachers’ stereotypes, elicited through an Implicit Association Test (IAT). We find that math teachers with stronger stereotypes give lower grades to immigrants compared to natives with the same performance. Literature teachers do not differentially grade immigrants based on their own stereotypes. Finally, we share teachers’ own IAT score with them, randomizing the timing of disclosure around the date on which they assign term grades. All teachers informed of their stereotypes before term grading increase grades assigned to immigrants. Revealing stereotypes may be a powerful intervention to decrease discrimination, but it may also induce a reaction from individuals who were not acting in a biased way.

In this paper, we show that, in terms of real disposable income, changes in housing expenditures dramatically exacerbate the trend of income inequality that has risen sharply in Germany since the mid-1990s. More specifically, whereas the 50/10 ratio of net household income increases by 22 percentage points (pp) between 1993 and 2013, it increases by 62 pp for income net of housing expenditures. At the same time, the income share of housing expenditures rises disproportionally for the bottom income quintile and falls for the top quintile. Factors contributing to these trends include a decline in the relative costs of homeownership versus renting, changes in household structure, and residential mobility toward larger cities. Younger cohorts spend more on housing and save less than older cohorts did at the same age, with possibly negative consequences for wealth accumulation, particularly for those at the bottom of the income distribution.

This paper studies a fair trade program in which consumers provide a wage subsidy (bonus) to piece-rate tomato pickers. The total subsidy—determined by sales to participating buyers—is divided among workers based on their relative output: a worker who produces more gets a larger share of the bonus. Although seemingly mimicking the existing piece-rate pay scheme, the mechanism associated with the bonus payment is really a relative performance evaluation, as the size of total bonus is exogenous and invariant to workers’ effort. Therefore, for a given sized subsidy, the combined total (or per worker average) utility gains would become the largest if the workers keep their efforts at the pre-program level. Empirical analysis shows that worker effort (and hence productivity) increases substantially in response to the program, suggesting that currently, workers’ combined gains per dollar of subsidy are not being maximized. Alternative distribution schemes are discussed.

Naturalization bestows economic benefits to immigrants, their families and communities through greater access to employment opportunities, higher earnings, and homeownership. It is the cornerstone of immigrant assimilation in the United States. Yet, less than 800,000 of the estimated 8.8 million legal permanent residents eligible to naturalize do so on a yearly basis. Using data from the 2008-2016 American Community Survey, we analyze how the expansion of interior U.S. immigration enforcement affects naturalization patterns. We find that the intensification of interior enforcement increases migrants’ propensity to naturalize and accelerates their naturalization, possibly in response to increased uncertainty about future immigration policy. Yet, the impacts are highly heterogeneous. For eligible-to-naturalize immigrants living in mixed-status households—households with at least one unauthorized member, we find the opposite effects. Intensified enforcement makes them less likely to naturalize or to delay their status adjustment, possibly to avoid any contact with immigration officials. Understanding how immigration policy influences naturalization decisions is important given the benefits to naturalization and the potential to counter the adverse impacts of tougher enforcement on the 16 million individuals, many of them U.S. citizens, residing in mixed-status households.

What is the role of international migrants and, specifically, migrant networks in shaping political attitudes and behavior in migrant sending countries? Our theoretical framework proposes that migration might change individual social identities and thus stimulate intrinsic motivation for political participation, while it may also improve knowledge about better quality political institutions. Hence, international migration might increase political awareness and participation both by migrants and by other individuals in their networks. To test this hypothesis, we use detailed data on different migrant networks (geographic, kinship, and chatting networks), as well as several different measures of political participation and electoral knowledge (self-reports, behavioral, and actual voting measures). These data were purposely collected around the time of the 2009 elections in Mozambique, a country with substantial emigration to neighboring countries – especially South Africa - and with one of the lowest political participation rates in the region. The empirical results show that the number of migrants an individual is in close contact with via regular chatting significantly increases political participation of residents in that village – more so than family links to migrants. Our findings are consistent with both improved knowledge about political processes and increased intrinsic motivation for political participation being transmitted through migrant networks. These results are robust to controlling for self-selection into migration as well as endogenous network formation. Our work is relevant for the many contexts of South-South migration where both countries of origin and destination are recent democracies. It shows that even in this context there may be domestic gains arising from international emigration.

We study the educational choices of children of immigrants in a tracked school system. We first show that immigrants in Italy enroll disproportionately into vocational high schools, as opposed to technical and academically-oriented high schools, compared to natives of similar ability. The gap is greater for male students and it mirrors an analogous differential in grade retention. We then estimate the impact of a large-scale, randomized intervention providing tutoring and career counseling to high-ability immigrant students. Male treated students increase their probability of enrolling into the high track to the same level of natives, also closing the gap in terms of grade retention. There are no significant effects on immigrant girls, who exhibit similar choices and performance as native ones in absence of the intervention. Increases in academic motivation and changes in teachers’ recommendation regarding high school choice explain a sizable portion of the effect, while the effect of increases in cognitive skills is negligible. Finally, we find positive spillovers on immigrant classmates of treated students, while there is no effect on native classmates.

In this paper, we evaluate the effects of payroll tax changes on firm behavior, by exploiting a unique policy setting in Norway, where a system of geographically differentiated payroll taxes was suddenly abolished due to an EU regulation. We find that firms are only partially able to shift the increased costs from higher payroll tax rates onto workers’ wages. Instead, firms respond to the tax increase primarily by reducing employment. The drop in employment following the tax reform is particularly pronounced in labor intensive firms—which experience a larger windfall loss due to the tax reform than non-labor intensive firms—and in multi-establishment firms—which respond to the payroll tax increase in part by reducing the number of establishments per firm. Overall, our findings point to liquidity effects whereby a sudden and largely unexpected payroll tax increase aggravates firms’ liquidity constraints, forcing them to cut employment to bring down costs.

There is a strong intergenerational correlation in welfare participation, but this does not imply that parental welfare receipt induces child receipt. While there are a few quasi-experimental studies that provide estimates of the causal effect of parental welfare participation for children from marginal welfare participants, we know very little about intergenerational spillovers of welfare participation onto the children of average welfare participants. By combining rich administrative data from Norway with weak mean-monotonicity assumptions, we estimate nonparametric bounds around the average causal effect of parental welfare participation on children’s welfare participation in the general population, as well as the average causal effect for children growing up in welfare-dependent families. We find that these average causal effects are considerably lower than the intergenerational correlation in welfare participation, and substantially below available local average treatment effect estimates in the literatu . We further find important differences between intergenerational spillovers of disability insurance and intergenerational spillovers of financial assistance, a traditional means-tested welfare program.

Does a high regional concentration of immigrants of the same ethnicity affect immigrant children’s acquisition of host-country language skills and educational attainment? We exploit the exogenous placement of guest workers from five ethnicities across German regions during the 1960s and 1970s in a model with region and ethnicity fixed effects. Our results indicate that exposure to a higher own-ethnic concentration impairs immigrant children’s host-country language proficiency and increases school dropout. A key mediating factor for this effect is parents’ lower speaking proficiency in the host-country language, whereas inter-ethnic contacts with natives and economic conditions do not play a role.

In this paper, we examine the heterogeneous treatment effects of a universal child care (preschool) program in Germany by exploiting the exogenous variation in attendance caused by a reform that led to a large staggered expansion across municipalities. Drawing on novel administrative data from the full population of compulsory school entry examinations, we find that children with lower (observed and unobserved) gains are more likely to select into child care than children with higher gains. This pattern of reverse selection on gains is driven by unobserved family background characteristics: children from disadvantaged backgrounds are less likely to attend child care than children from advantaged backgrounds but have larger treatment effects because of their worse outcome when not enrolled in child care.

The paper presents an empirical analysis of inter-ethnic relations among adolescents in England’s schools, the first national study of schools throughout England to relate inter-ethnic attitudes to both school and area ethnic composition. We combine survey data on ‘warmth’ of feeling for specific ethnic groups, friendships and attitudes with administrative data on the shares of those groups at school and area level. We confirm that the pupils have warmer feelings for their own ethnic group than for others. Second, we show that in schools with more pupils from another ethnic group the gap between a pupil’s views of those from her own group and from another ethnic group is smaller. This is true for attitudes of the majority and of minority ethnic groups. Third, we show that school composition (interpreted as contact) mitigates area composition (interpreted as exposure).

The Spanish welfare state was practically inexistent in the 1980s. It expanded throughout the 1990s and became fully in place by the 2000s. At the same time, internal migration rates dropped to less than 0.3 percent –among the lowest in the world. In a country with large labor market imbalances, internal mobility can prove crucial to economic growth. We look at the role that non-contributory pensions might have played on inter-provincial mobility over the past two decades. We find that the expansion of the welfare state has curtailed the mobility of young working-age individuals, especially less educated women. The effects are unique to non-contributory pensions, and are not restricted to cohabitating family members or tied to the care for disabled relatives, signaling the need for policy measures that facilitate the mobility of the young from lower income households.

This paper studies whether an exogenous reduction in the criminal activity of one individual lowers crimes committed by other young men who live in the immediate neighborhood. Using the randomness of a child’s gender, we first show that men who father their first child at a very young age are convicted of significantly fewer crimes in the first years after the birth if the child is a son rather than a daughter. We next show that this leads to behavioral spillovers that significantly reduce criminal convictions among other young men living in the same neighborhood as the father at the child’s birth, as well as victimization rates, for at least five years after birth. Evaluating our estimates within a structural model shows that spillovers in crime generate crime multipliers that continue to increase even after the primary impact of the initial shock on the focal individual has dissipated. From the model we further illustrate that crime prevention policies that target high crime individuals at an early stage of their lives are likely to lead to far larger reductions in the cost of crime than suggested by the primary effects alone.

This paper analyses the way households in rural China use rural-urban migration and off-farm work as a response to negative productivity shocks in agriculture. I employ various waves of a longitudinal survey to construct a panel of individual migration and labour supply histories, and match them to detailed weather information, which I use to instrument agricultural productivity. For identification, I exploit the year-by-county variation in growing season rainfalls to explain within-individual changes in labor allocation. Data on days of work supplied to each sector allow to study the responses to weather shocks along both the participation and the intensive margin. Results suggest that farming activity decreases by 4.5% while migration increases by about 5% in response to a 1-standard deviation negative rainfall shock. Increment in rural-urban migration derives from both longer spells in the city as well as raise in the likelihood to participate in the urban sector. I find interesting heterogeneous responses across generations driven by age-specific migration costs and changes in the relative productivity of sectors. Finally, land tenure insecurity seems to partially prevent households from freely reallocating labor away from farming in bad times.

We estimate whether migration can be an equilibrating force in the labour market by comparing pre- and post-crisis migration movements at the regional level in both Europe and the United States, and their association with asymmetric labour market shocks. Based on fixed-effects regressions using regional panel data, we find that Europe’s migratory response to unemployment shocks was almost identical to that recorded in the United States after the crisis. Our estimates suggest that, if all measured population changes in Europe were due to migration for employment purposes – i.e. an upper-bound estimate – up to about a quarter of the asymmetric labour market shock would be absorbed by migration within a year. However, in Europe and especially in the Eurozone, the reaction to a very large extent stems from migration of recent EU accession country citizens as well as of third-country nationals.

A large literature exploits geographic variation in the concentration of immigrants to identify their impact on a variety of outcomes. To address the endogeneity of immigrants’ location choices, the most commonly-used instrument interacts national inflows by country of origin with immigrants’ pastgeographic distribution. We present evidence that estimates based on this “shift-share” instrument conflate the short- and long-run responses to immigration shocks. If the spatial distribution of immigrant inflows is stable over time, the instrument is likely to be correlated with ongoing responses to previous supply shocks. Estimates based on the conventional shift-share instrument are therefore unlikely to identify the short-run causal effect. We propose a “multiple instrumentation” procedure that isolates the spatial variation arising from changes in the country-of-origin composition at the national level and permits us to estimate separately the short- and long-run effects. Our results are a cautionary tale for a large body of empirical work, not just on immigration, that rely on shift-share instruments for causal inference.

In recent years many countries increased border controls, partly in response to public concerns that open borders are favoring cross-border crime. Despite these widespread concerns, empirical research on whether public fears are justied is still scarce. This article evaluates whether the abolishment of border controls at the eastern German and Austrian borders accompanying the implementation of the Schengen Treaty in December 2007 increased crime rates in border counties of these countries. Based on official crime statistics, conditional difference-in-differences estimation allows the evaluation of border controls in a causal way. Results show that in Germany and Austria only for burglaries a significant positive effect can be observed suggesting that for this type of criminal offense, public concerns proved to be justified. In contrast, for overall crime rates as well as for other common types of crime against property no significant effect can be observed, indicating that there is only little empirical evidence for the widespread concerns about public security.

In this paper, we use repeated cross-sectional survey data to study the labour market performance of refugees across several EU countries and over time. In the first part, we document that labour market outcomes for refugees are consistently worse than those for other comparable migrants. The gap remains sizeable even after controlling for individual characteristics as well as for unobservables using a rich set of fixed effects and interactions between area of origin, entry cohort and destination country. Refugees are 11.6 percent less likely to have a job and 22.1 percent more likely to be unemployed than migrants with similar characteristics. Moreover, their income, occupational quality and labour market participation are also relatively weaker. This gap persists until about 10 years after immigration. In the second part, we assess the role of asylum policies in explaining the observed refugee gap. We conduct a difference-in-differences analysis that exploits the differential timing of dispersal policy enactment across European countries: we show that refugee cohorts exposed to these polices have persistently worse labour market outcomes. Further, we find that entry cohorts admitted when refugee status recognition rates are relatively high integrate better into the host country labour market.

We use administrative panel data on about a quarter of a million students in the German state of Hesse to estimate the causal effect of class size on school tracking outcomes after elementary school.Our identification strategy relies on the quasi-random assignment of students to different class sizes based on maximum class size rules.In Germany,students are tracked into more orless academic middle school types at about age ten based,to a large extent,on academic achievement in elementary school. We mostly find no or small effects of class size in elementary school on receiving a recommendation or on the actual choice to attend the more academic middle school type.For male students,we find that an increase in class size by 10 students would reduce their chance of attending the higher school track which more than 40 percent of students attend by 3 percentage points.

This paper aims to explain the slow economic convergence between groups of different ancestries in the US, i.e. why these groups experience even less intergenerational mobility than individuals in the same country. It shows how excessively persistent inequality may be a long-lasting outcome of ancestors’ self-selection into migration, and need not involve e.g. ethnicity-based behaviors. A testable implication is that the correlation between home country characteristics that influence self-selection, and migrants’ and their descendants’ outcomes should increase generation by generation. Verifying this, their ancestors’ migration distance has risen to explain around half the inequality between fourth-generation immigrant groups today.

The consequences of rising import competition for labor markets have been extensively explored in the recent literature. This paper uses a historical case of market opening, and shows how market globalization forces interacted with international migration choices between 1881 and the outbreak of the First World War. We present new data on historical Italian emigration at the province level and document that emigration rates varied substantially by locality, which has been largely unexplained in the literature. Indeed, provinces were differentially exposed to global forces according to their initial-year crop intensities. We explore the determinants of these outflows, focusing on globalization forces alongside more traditional explanatory factors such as migrant stocks and landholding structures. We find that migration was positively related to an index of exogenous global prices, which we interpret as an indication that most Italians were still in a poverty trap and lacked the funds to migrate unless agricultural incomes reached a sufficient level.

This paper analyzes the interaction between migrant networks and linguistic distance in the location choice of migrants to the EU at the regional level. We test the hypothesis that networks and the ability to communicate in the host country language, proxied by linguistic distance, are substitutes in the location decision. Based on individual level data from a special evaluation of the European Labour Force Survey (EU-LFS) and a random utility maximization framework, we find that networks have a positive effect on the location decisions while the effect of linguistic distance is negative. We also find a strong positive interaction effect between the two factors: networks are more important the larger the linguistic distance between the home country and the host region, and the negative effect of linguistic distance is smaller the larger the network size. In several extensions and robustness checks, we show that this substitutable relationship is extremely robust.

Tougher immigration enforcement has been responsible for 1.8 million deportations between 2009 and 2013 alone, most of them involving fathers and heads of household. We exploit the geographic and temporal variation in intensified enforcement to gauge its impact on children’s propensity to live without their parents in households headed by relatives or friends, or in households singly headed by their mothers with absentee spouses. Given the emotional, cognitive and long run socioeconomic costs of being raised without parents or in a single-headed household, gaining a better understanding of the collateral damage of heightened enforcement on the families to which these children belong is well warranted.

With girls having overtaken boys in many education indicators, the “feminization” of elementary school teaching is causing debates about disadvantages for male students. Using administrative panel data on the universe of students, teachers and schools for a German state, I exploit within school and within teacher variation to determine teacher characteristics’ effects on students’ tracking outcomes. Germany tracks students at age 10 into more or less academic school types. I find hardly any effects of teacher’s gender, age, pay level, qualifications, or working hours on boys’ or girls’ school track recommendations or school choice. Even when following students into middle school, no effects of elementary-school teacher gender on school type change or grade repetition can be detected.

We examine the long-run effects of forced migration from Eastern Europe into post-war Germany. Existing evidence suggests that displaced individuals are worse off economically, facing a considerably lower income and a higher unemployment risk than comparable natives even twenty years after being expelled. We extend this literature by investigating the relative performance of forced migrants across the entire life cycle. Using social security records that document the exact date of death and a proxy for pre-retirement lifetime earnings, we estimate a significantly and considerably higher mortality risk among forced migrants compared to native West-Germans. The adverse displacement effect persists throughout the earnings distribution except for the top quintile. Although forced migrants are generally worse off regarding mortality outcomes, those with successful labor market histories seem to overcome the long-lasting negative consequences of flight and expulsion.

This paper investigates the consequences of the legalization of around 600,000 immigrants by the unexpectedly elected Spanish government of Zapatero following the terrorist attacks of March 2004 (Garcia-Montalvo, 2011). Using detailed data from payroll-tax revenues, we estimate that each newly legalized immigrant increased local social-security revenues by 3,504 Euros on average. This estimate is only 49 percent of what we would have expected from the size of the newly documented immigrants, which suggests that newly legalized immigrants probably earned lower wages than, and maybe affected the labor-market outcomes of, other workers. We estimate that the policy change deteriorated the labor-market outcomes of some low-skilled natives and immigrants and improved the outcomes of highskilled natives and immigrants. This led some low-skilled immigrants to move away from high-immigrant locations. Correcting for internal migration and selection, we obtain that each newly legalized immigrant increased payroll-tax re nues by 4,368 Euros or 25 percent more than the raw payroll-tax revenue data estimates. This shows the importance of looking both at public revenue data and the labor market to understand the consequences of amnesty programs fully.

This paper investigates the causes and effects of the spatial distribution of immigrants across US cities. We document that: a) immigrants concentrate in large, high-wage, and expensive cities, b) the earnings gap between immigrants and natives is higher in larger and more expensive cities, and c) immigrants consume less locally than natives. In order to explain these findings, we develop a simple quantitative spatial equilibrium model in which immigrants consume (either directly, via remittances, or future consumption) a fraction of their income in their countries of origin. Thus, immigrants not only care about local prices, but also about price levels in their home country. Hence, if foreign goods are cheaper than local goods, immigrants prefer to live in high-wage, high-price, and high-productivity cities, where they also accept lower wages than natives. Using the estimated model we show that current levels of immigration have reduced economic activity in smaller, less productive cities by around 3 percent while they have expanded the activity in large and productive cities by around 4 percent. This has increased total aggregate output per worker by around .15 percent.

An inflow of immigrants into a region impacts house prices in three ways. For a fixed level of local population, housing demand rises due to the increase in foreign-born population. In addition, immigrants can influence native location decisions and induce additional shifts in demand. Finally, changes in housing supply conditions can in turn affect prices. Existing reduced form estimates of the effect of immigration on house prices capture the sum of all these effects. In this paper I propose a methodology to identify the different channels driving the total effect. I show that, conditional on supply, total changes in housing demand can be decomposed into the sum of direct immigrant demand and indirect demand changes from relocated population. The size and sign of the indirect demand effect depends on the impact of immigration on native mobility. I use Spanish data during the period 2001-2012 to estimate the different elements of the decomposition, applying an instrumental variables strategy to obtain consistent coefficients. The results show that overlooking the impact of immigration on native location induces a sizeable difference between the total and the immigrant demand effects, affecting the interpretation of the estimates.

The yearly cap on H-1B visas became binding for the first time in 2004, making it harder for college-educated foreigners to work in the United States. However, academic institutions are exempt from the cap and citizens of five countries (Canada, Mexico, Chile, Singapore, and Australia) have access to alternative work visas. We exploit those exemptions to gauge how immigrant career choices are affected by the binding visa cap. Among other impacts, the binding cap raises international students’ likelihood of employment in academia, even outside of their field of study, a result consistent with the notion of “settling for academia.”

The 1986 US Immigration Reform and Control Act (IRCA) was directed at tackling the problem of growing unauthorized migration through legalization of unauthorized immigrants, increasing border security and sanctioning employers who hired unauthorized immigrants. Our paper investigates how the IRCA affected the migration dynamics of Mexican immigrants focusing on their age of onset of migration and the duration of their first trip. We find that the IRCA had a positive effect in reducing unauthorized migration to the US. Although primarily aiming at unauthorized immigration, the IRCA had substantial effects on legal migration through its legalization program.

Gender differences in labor force participation are exceptionally small in Nordic countries. We investigate how couples emigrating from Denmark self-select and sort into different destinations and whether couples pursue the dual-earner model, in which both partners work, when abroad. Female labor force participation is slightly lower among couples that later emigrate, and drops considerably after migration outside the Nordic countries. Pre migration differences between couples subsequently migrating to different destinations are small. Our survey reveals that couple migration is usually driven by the male’s job opportunities. The results suggest that increasing international migration may reduce women’s career investments.

We examine patterns of labor market integration across immigrant groups. The study draws on Norwegian longitudinal administrative data covering labor earnings and social insurance claims over a 25‐year period and presents a comprehensive picture of immigrant‐native employment and social insurance differentials by admission class and by years since entry. For refugees and family immigrants from low-income source countries, we uncover encouraging signs of labor market integration during an initial period upon admission, but after just 5‐10 years, the integration process goes into reverse with widening immigrant-native employment differentials and rising rates of immigrant social insurance dependency. Yet, the analysis reveals substantial heterogeneity within admission class and points to an important role of host‐country schooling for successful immigrant labor market integration.

Islamic law lays down detailed rules regulating the upbringing of children. This study examines the effect of such rules on parental behaviour by analysing the introduction of Sharia law in northern Nigeria. The empirical strategy exploits variation across administrative areas, time and religion together with the fact that the historical homelands of some Nigerian ethnicities fall into both states that introduced Islamic laws and states that did not. Estimates show that the introduction of Sharia law increased fertility, the duration of breastfeeding and primary school enrolment. Evidence further suggests that the Sharia affected behaviour by increasing the economic returns to sons and by raising the value of conspicuous adherence to Islam.

We analyze the effects of increased immigration of foreign workers on the unionisation rates of native workers in Austrian firms over the period 2002–2012. Our results suggest that lower union density of natives’ in firms with more foreign workers is driven not by natives leaving unions, but by the different composition of turnover depending on the share of foreigners in the firm.

This paper addresses the effect of personal contacts on immigrants’ legal status by focusing particularly on the contacts’ direct links to legal status and indirect associations with the labor market. The overall effect of these contacts is theoretically unsigned and likely to vary across contact type and contextual factors. Our empirical analysis, based on unique Italian survey data on both documented and undocumented immigrants, tests two hypotheses regarding native contacts: (i) that they are more likely to be associated with a higher immigrant documentation probability and (ii) that they are more likely to introduce immigrants to jobs that facilitate access to employment-based legalization initiatives. Our results indicate that contacts with both natives and family members have a direct, positive, and quantitatively large effect on immigrant documentation probability, whereas contacts with members of the same ethnic group only indirectly increase documentation probability by raising the probability of employment. Our findings also support the hypothesis that native contacts connect immigrants with better jobs.

The goal of our paper is to better understand the economic implications of Temporary Foreign Worker (TFW) programs as well as comprehend the underlying reasons for the rapid expansion of the number of TFWs hired by employers under the Canadian program brought to light in 2014. We present an efficiency wage model that allows for the possibility that a firm, unable to find a worker after advertising for a period of time, may hire a TFW at the advertised wage. Due to the assumed lower outside option for the TFW than the domestic worker, the TFW will exert higher effort than a domestic worker even if the TFW is paid the same wage as would have been paid to a domestic worker. In equilibrium, lower wage oers are made to less-skilled domestic workers when a TFW program of this kind is in place. The model also implies higher unemployment rates for domestic workers after the introduction of a TFW program. Our empirical analysis is based on the confidential master files of the Canadian Census (1991-2006) and the Labor Force survey (2006-2013). We find that TFWs in Canada work longer hours, have lower rates of absenteeism, and are less likely to be laid off, consistent with higher effort in our model. Moreover, TFWs work at lower wage rates than domestic workers even for similar job characteristics, which is also a prediction of our model.

Research on the relationship between high-skilled migration and remittances has been limited by the lack of suitable microdata. We create a unique cross-country dataset by combining household surveys from five Sub-Saharan African countries that enables us to analyze the effect of migrants’ education on their remittance behavior. Having comprehensive information on both ends of the migrant-origin household relationship and employing household fixed effects specifications that only use within-household variation for identification allows us to address the problem of unobserved heterogeneity across migrants’ origin households. Our results reveal that migrants’ education has no significant impact on the likelihood of sending remittances. Conditional on sending remittances, however, high-skilled migrants send significantly higher amounts of money to their households left behind. This effect holds for the sub-groups of internal migrants and migrants in non-OECD countries, while it vanishes for migrants in OECD destination countries once characteristics of the origin household are controlled for.

We classify the empirical literature on the wage impact of immigration into three groups, where studies in the first two estimate different relative effects, and the third the total effect of immigration on wages. We interpret the estimates obtained from the different approaches through the lens of the canonical model to demonstrate that they are not comparable. We then relax two key assumptions in this literature, allowing for inelastic and heterogeneous labor supply elasticities of natives and the downgrading of immigrants. We show that heterogeneous labor supply elasticities, if ignored, may complicate the interpretation of wage estimates, in particular of relative wage effects. Moreover, downgrading may lead to biased estimates in those approaches that estimate relative effects of immigration, but not in approaches that estimate total effects. We conclude that empirical models that estimate total effects not only answer important policy questions, but are also more robust to alternative assumptions than models that estimate relative effects.

We estimate the eect of immigrant legalization on the crime rate of immigrants in Italy by exploiting an ideal regression discontinuity design: fixed quotas of residence permits are available each year, applications must be submitted electronically on specific 'Click Days', and are processed on a first-come, first-served basis until the available quotas are exhausted. Matching data on applications with individual- level criminal records, we show that legalization reduces the crime rate of legalized immigrants by 0.6 percentage points on average, on a baseline crime rate of 1.1 percent.

High-skilled workers are four times more likely to migrate than low-skilled workers. This skill bias in migration - often called brain drain - has been at the center of a heated debate about the welfare consequences of emigration from developing countries. In this paper, we provide a global perspective on the brain drain by jointly quantifying its impact on the sending and receiving countries. In a calibrated multi-country model, we compare the current world to a counterfactual with the same number of migrants, but those migrants are randomly selected from their country of origin. We find that the skill bias in migration significantly increases welfare in most receiving countries. Moreover, due to a more efficient global allocation of talent, the global welfare effect is positive, albeit some sending countries lose. Overall, our findings suggest that more - not less - high-skilled migration would increase world welfare.

The recent referendum in the UK on membership of the EU has sent shockwaves across the political establishment not just in the UK itself and throughout Europe, but also around the world. In the runup to the referendum, economists were (perhaps for the first time) united in pointing out that the economic case for Brexit is rather slim, that hardly any well-argued reason could be given by the Brexit camp as to why it may be a good idea to leave the EU, and that the economic consequences could be severe. That lack of economic argument in favour of Brexit, which should have been the key battleground in the run up to the referendum, led the debate to focus on one particular issue, Immigration. Like the free movement of goods, capital, and services, a fundamental pillar of the EU, and a non-negotiable requirement for any new member state, is the free movement of people. It is that particular aspect of EU membership that became the strongest single assertion of the Brexit camp. The inability to control immigration f m within the EU was made a symbol for everything else Brexit stood for (such as the idea of “sovereignty” or the pain of being subjugated to “rules made in Brussels and not the UK”), but – again – fact-based arguments against free mobility on economic or welfare grounds were hard to find. Nevertheless, free mobility within the EU became quickly the scapegoat for the economic and social woes that had distressed the country since the great recession, and perhaps even earlier, such as crime, real wage decline, inequality, unemployment, access to social services, health provision, and benefits and transfers. “Immigration” and everything people associated with it and were encouraged to believe by a relentless campaign of the majority of the tabloid press decisively contributed to the decision that the UK took on June 23, 2016. Immigration and free mobility will likely again be central in the negotiations between the UK and its European partners in developing a model for Brexit that minimises the economic costs fo both the UK and the EU.

We investigate the dynamic effects of interregional labor market integration on migration flows, capital formation, and the price for housing services. The co-evolution of these variables depends on initial conditions at the time of labormarket integration. In an initially capital-poor economy, there may be a reversal of migration flows during the transition to the steady state, while housing costs are increasing over time. Although capital may accumulate while labor emigrates early in the transition, the causal effect of immigration on capital investments and housing costs is positive. We present new data on the evolution of net migration flows and rental rates for housing in East Germany after 1990. Our results are consistent with the presented evidence in the reverse migration scenario.

Do general amnesty programs lead to reductions in the crime rate among immigrants? We answer this question by exploiting both cross-sectional and time variation in the number of immigrants legalized generated by the enactment of repeated amnesty programs between 1990 and 2005 in Italy. We address the potential endogeneity of the "legalization treatment" by instrumenting the actual number of legalized immigrants with alternative predicted measures based on past amnesty applications patterns and residential choices of documented and undocumented immigrants. We find that, in the year following an amnesty, regions in which a higher share of immigrants obtained legal status experienced a greater decline in non-EU immigrant crime rates, relative to other regions. The effect is statistically significant but relatively small and not persistent. In further results, we fail to find any evidence of substitution in the criminal market from other population groups - namely, EU immigrants and Italian citizens - and we observe small and not persistent reduction in total offenses.

Consider the duration of stay of migrants in a host country. We propose a statistical model of locally interdependent hazards in order to examine whether interactions at the level of the neighbourhood are present and lead to social multipliers. To this end, we propose and study a new two-stage estimation strategy based on an inverted linear rank test statistic. Using a unique large administrative panel dataset for the population of recent labour immigrants to the Netherlands, we quantify the local social multipliers in several factual and counterfactual experiments, and demonstrate that these can be substantial.

To estimate the causal effect of refugee migration on voting outcomes in parliamentary and municipal elections in Denmark, our study is the first that addresses the key problem of immigrant sorting by exploiting a policy that assigned refugee immigrants to municipalities on a quasi-random basis. We find that – in all but the most urban municipalities - allocation of larger refugee shares between electoral cycles leads to an increase in the vote share not only for parties with an anti-immigration agenda but also for centre-right parties, while the vote share for centre-left parties decreases. However, in the largest and most urban municipalities refugee allocation has – if anything – the opposite effect on vote shares for anti-immigration parties. We demonstrate response heterogeneity according to municipal characteristics, with a more pronounced response in less urban municipalities in which the pre-policy shares of both immigrants and the more affluent is high, and in urban municipalities with high unemployment. At the same time, higher pre-policy crime rates are associated with more support for anti-immigration parties in response to refugee allocation in both urban and non-urban municipalities. We also find some evidence that refugee allocation influences voter turnout. Moreover, it has a large impact on the decision of anti-immigration parties’ choice of where to stand for municipal election.

Immigrants in many Western countries have experienced poor economic outcomes.This hasled to a lack of integration of child immigrants(the 1.5 generation) and the second generation in some countries. However,in Canada, child immigrants and the second generation have on average integrated very well economically. We examine the importance of Canada's admission classes to determine if there is an earnings benefit of the selection under the Economic Classes to: 1) the Adult Arrival immigrants and 2) the Child Arrival immigrants (1.5 generation) once old enough to enter the labour market. We employ unique administrative data on landing records matched with subsequent income tax records that also allows for the linking of the records of Adult Arrival parents and their Child Arrival children. We find, relative to the Family Class, the Adult Arrivals in the Skilled Worker category have earnings that are 29% higher for men and 38% higher for women. These differences persist even after controlling for detailed personal characteristics such as education and language fl uency at 21% for men and 27% for women. Child Arrival immigrants landing in the Skilled Worker Class have earnings advantages (as adults) over their Family Class counter parts of 17% for men and 21% for women. These Child Arrival Skilled Worker advantages remain at 9% for men and 14% for women after controlling for child characteristics, the Principal Applicant parent's characteristics and the parent's subsequent income in Canada.

By exploiting a commuting policy that led to a sharp and unexpected inflow of Czech workers to areas along the German-Czech border, we examine the impact of an exogenous immigration-induced labor supply shock on local wages and employment of natives. On average, the supply shock leads to a moderate decline in local native wages and a sharp decline in local native employment. These average effects mask considerable heterogeneity across groups: while younger natives experience larger wage effects, employment responses are particularly pronounced for older natives. This pattern is inconsistent with standard models of immigration but can be accounted for by a model that allows for a larger labor supply elasticity or a higher degree of wage rigidity for older than for young workers. We further show that the employment response is almost entirely driven by diminished inflows of natives into work rather than outflows into other areas or non-employment, suggesting that “outsiders” shield “insiders” from the increased competition.

This paper provides a comprehensive review and analysis of refugee migration, with emphasis on the current refugee crisis. After first reviewing the institutional framework laid out by the Geneva Convention for Refugees, we demonstrate that, despite numerous attempts at developing a common European asylum policy, EU countries continue to differ widely in interpretation and implementation. We then describe key features of the current refugee crisis and document the overall magnitudes and types of refugee movements, illegal border crossings, and asylum applications to EU member states. We next turn to the economics of refugee migrations, contrasting economic and refugee migrants, discussing the trade-offs between long-term asylum and temporary protection, and highlighting the economic advantages of increasingly coordinating the different national asylum policies. Finally, we illustrate the economic integration of past refugee migrants to EU countries and conclude with several policy recommendations.

We compare employment and earnings of British graduates belonging to ethnic minorities to those of white British six months and three and a half years after graduation. Six months after graduation all ethnic minority graduates are less likely than whites to be employed but those who have a job earn similarly or more than whites. University choice, parental background and area characteristics account for a large part of the ethnic differences in earnings but do not explain ethnic differences in employment. Three and a half years after graduation the ethnic advantages in earnings disappear while employment penalties reduce. Both employment probability and earnings increase over the career in a similar way for whites and minorities, with only few exceptions.

We study how migration from a poor to a rich country affects key economic beliefs, preference parameters, and transnational household decision-making efficiency. Our setting is the migration of Tongans to New Zealand through a migration lottery program. In a ten-year follow-up survey of individuals applying for this program we elicit risk and time preferences and pro-market beliefs. We also link migrants and potential migrants to a partner household consisting of family members who would stay behind if they moved. We play lab-in-the-field games designed to measure the degree of intra-family trust and the efficiency of intra-family decision-making. Migration provides a large and permanent positive shock to income, a large change in economic institutions, and a reduction in interactions with partner household members. Despite these changes, we find no significant impacts of migration on risk and time preferences, pro-market beliefs, or in the decision-making efficiency of transnational households. This stability in the face of such a large and life-changing event lends credence to economic models of migration that treat these determinants of decision-making as time-invariant, and contrasts with recent evidence on preference changes after negative shocks.

The impact that an unforeseen event has on household welfare depends on the extent to which household members can take actions to mitigate the direct impact of the shock. In this paper, we use nine years of longitudinal data from the Household Income Labour Dynamics of Australia (HILDA) survey to examine the impact of job displacement and serious health problems on: individual labour supply and incomes, household incomes and food expenditure. We extend on the previous literature by examining whether mitigation strategies and their effectiveness differs for the native-born and immigrants. Immigrants make up nearly one quarter of the Australian population and there are a number of reasons to suspect that they may be less able to mitigate adverse shocks than the native-born.

We examine vulnerability to poverty in Tajikistan during the global financial crisis, focusing on the roles played by international migration and remittances, using a formal, practical, and easily decomposable vulnerability measure. Our strategy is to estimate a Markov transition probability matrix with the aim of identifying the vulnerability of households to poverty. Importantly, by introducing the index of vulnerability as the weighted probability of a household falling into poverty over a given time horizon, we can use the estimated dynamics to assess the short, medium and long-run vulnerability. We find that during the “recession transition” almost all households were vulnerable to poverty while almost none were during the “recovery period”. Overall, urban households, more educated households and households receiving remittances from international labor migrants were less vulnerable to poverty. While households with a current or very recent migrant did not have a significantly lower measured vulnerabilit to poverty, those households receiving remittances from migrants had a lower vulnerability to poverty. Our findings stress that the international labor migration from Tajikistan may not be considered as a reliable means of welfare security for the households because external economic shocks and internal political decisions may negatively affect Russian economy and lead to a reduction of remittances flow to Tajikistan.

We consider the issue of measuring segregation in a population of small units, considering establishments in our application. Each establishment may have a different probability to hire an individual from the minority group. We define segregation indices as inequality indices on these unobserved, random probabilities. Because these probabilities are measured with error by proportions, standard estimators are inconsistent. We model this problem as a nonparametric binomial mixture. Under this testable assumption and conditions satisfied by standard segregation indices, such indices are partially identified and sharp bounds can be easily obtained by an optimization over a low dimensional space. We also develop bootstrap confidence intervals and a test of the binomial mixture model. Finally, we apply our method to measure the segregation of foreigners in small French firms.

This paper investigates the heterogeneity of ethnic employment gaps using a new single-index based approach. Instead of stratifying our sample by age or education, we study ethnic employment gaps along a continuous measure of employability, the employment probability minority workers would have if their characteristics were priced as in the majority group. We apply this method to French males, comparing those whose parents are North African immigrants and those with native parents. We find that both the raw and the unexplained ethnic employment differentials are larger for low-employability workers than for high-employability ones. We show in a theoretical framework that this heterogeneity can be accounted for by homogeneous underlying mechanisms and is not evidence for, say, heterogeneous discrimination. Finally, we discuss our main empirical findings in the light of simple taste-based vs. statistical discrimination models.

The assumption that all migrations are permanent, which pervaded the early microdata-based research on immigrant career profiles, is not supported by the empirical evidence. Rather, many – if not most – migrations appear to be temporary. In this paper, therefore, we illustrate the estimation challenges when migrations are temporary. As in an overwhelming share of the selective out-migration literature, our basic structure assumes that the process that determines out-migration is unrelated to other choices that affect wage growth, such as human capital investment or labour supply decisions, which greatly simplifies the analysis. When the choice of whether and when to out-migrate also affects decisions that determine wage growth, the problem becomes inherently dynamic and requires a more structural approach to estimation, which we briefly discuss.

The vast majority of immigrants to the United States at the beginning of the 20th century adopted first names that were common among natives. The rate of adoption of an American name increases with time in the US, although most immigrants adopt an American name within the first year of arrival. Choice of an American first name was associated with a more successful assimilation, as measured by job occupation scores, marriage to a US native and take-up of US citizenship. We examine economic determinants of name choice, by studying the relationship between changes in the proportion of immigrants with an American first name and changes in the concentration of immigrants as well as changes in local labor market conditions, across different census years. We find that high concentrations of immigrants of a given nationality in a particular location discouraged members of that nationality from taking American names. Poor local labor market conditions for immigrants (and good local labor market conditions for natives) led to more frequent name changes among immigrants.

Both migrant entrepreneurship and social capital are topics which have attracted a great deal of attention. However, relatively little econometric analysis has been done on their interrelationship. In this paper we first consider the relationship between social capital and the prevalence of entrepreneurship. We also investigate the relationship between social capital and the living standards of entrepreneurs. In both cases we ask whether these interrelationships differ between migrants and comparable native-born people. We utilize unit record data from the pooled 2008, 2010 and 2012 New Zealand General Social Surveys (NZGSS). The combined sample consists of 15,541 individuals who are in the labour force. Entrepreneurs are defined as those in the sample who obtained income from self-employment or from owning a business. Social capital is proxied by responses to questions on social networks, volunteering and sense of community. The economic standard of living is measured by either personal income or by an Economic Living Standards Index (ELSI) score developed by the New Zealand Ministry of Social Development. We find significant differences between migrants and the native born in terms of the attributes of social capital that are correlated with entrepreneurship, but volunteering matters equally for both groups. The positive association between social capital attributes and ELSI scores is similar between migrant and natives. Social capital contributes little to explaining incomes of either group.

We document large differences in educational attainment, criminal sentences and use of psychotropic medication between the children of immigrants and natives living in Finland. Among the offspring of immigrants from the OECD countries and the former Soviet Union, the disadvantage in education reverses and differences in criminal sentences disappear once we condition on parental income and location of residence. In contrast, large gaps remain for the children of immigrants from other regions, even conditional on background characteristics. Furthermore, the children of immigrants from all source areas are substantially less likely to use psychotropic medication than the offspring of natives despite their higher self-reported mental health problems. These results suggest that institutions designed to help disadvantaged natives do not fully reach the children of immigrants.

Self-employment constitutes a vital part of the economy since entrepreneurs can provide not only employment for themselves but also for others. The link between self-employment and immigration is, however, complex since self-employment can be viewed as both a haven from the paid labour market or as a source of economic growth. Moreover, the nature of self-employment has changed considerably in recent decades, especially with regards to providing a flexible form of employment for many demographic groups. We investigate the evolving relationship between self-employment and immigration in the UK using recently released microdata from the 2011 Census for England and Wales. Our findings indicate large variations, with high self-employment rates observed for some groups with a long established history of migration to the UK (especially men born in Pakistan) and also for some groups who have arrived more recently (such as from the EU’s new member states). We further explore the differences, analyse variations by gender and identify key determining factors. In addition to certain socio-economic characteristics, it is found that migration-related influences, such as English language proficiency and period of arrival in the UK, play an important role for some groups.

In this paper, we examine possible types of network formation among immigrants in the diaspora and between those immigrants and the locals in different countries. We present the model by considering different possible interactions between immigrants and the new society in their host country. Spread of migrants from the same origin in the diaspora may well increase international trade between the different countries, depending on the types of networks formed. We present possible applications of network structure on the country of origin, such as on international trade. We find that when the size of the diaspora is sufficiently large, the natives in the different countries will be willing to bear the linking cost with the immigrants because the possible benefits increase with increasing size of the diaspora.

In the context of increasing women’s labour force participation (LFP) across Western countries, there remain large differences in LFP for women of different ethnic origins. While existing research has demonstrated that part of these differences can be attributed to compositional differences (age, qualifications, family context etc.) and to differences in gender role attitudes and religiosity, residual ‘ethnic effects’ typically remain. Further insight into the drivers of such differences has the potential to inform us about factors shaping women’s LFP more widely. In this paper we exploit a large-scale longitudinal study of the UK to investigate ethnic differences in both LFP entry and exit probabilities. We examine how far we can account for overall ethnic differences in LFP entry and exit, taking account of individual characteristics, gender role attitudes and religiosity, and the contribution of relevant life-course events. We find that, adjusting for all these factors, Indian and Caribbean women do not differ from White majority women in their labour force entry and exit probabilities but that Pakistani and Bangladeshi women are less likely to enter and more likely to exit the labour market, while Black African women have higher entry rates. We also find that Pakistani and Bangladeshi women’s labour market entries and exits are less sensitive to partnership and child-bearing events than other women’s.

While integration policies typically focus on labor market entry, we present evidence showing that immigrants from low‐income countries tend to have more precarious jobs, and face more severe consequences of job loss, than natives. For immigrant workers in the Norwegian private sector, the probability of job loss in the near future is twice that of native workers. Using corporate bankruptcy for identification, we find that the adverse effects of job loss on future employment and earnings are more than twice as large for immigrant employees.

This paper investigates the influence of media on the beliefs and perceptions individuals hold, with a focus on crime perceptions. We study the case of Italy, where the majority of television channels have been under the influence of the former Prime Minister Silvio Berlusconi for more than a decade. First, we document that these channels systematically over represent crime news compared to others. We then test if individuals revise their perceptions about crime when exposure to news programs broadcast by a specific group of partisan channels is reduced. In order to identify the causal effect we exploit a natural experiment in the Italian television market where the staggered introduction of the digital TV signal led to a drastic drop in the viewing shares of the channels above. Combining unique data on each channel’s crime news coverage and prime-time viewing shares, we find that reduced exposure to crime related news decreased concerns about crime, an effect that is mainly driven by older individuals who, on average, watch more television and use alternative sources of information (such as Internet, radio and newspapers) less frequently. Finally, we show that this change in crime perceptions is likely to have important implications for voting behaviour.

We develop a theoretical model regarding the migration of dual-earner couples and test it in the context of international migration. Our model predicts that the probability that a couple emigrates increases with the income of the primary earner, whereas the income of the secondary earner may affect the decision in either direction. We conduct an em-pirical analysis that uses population-wide administrative data from Denmark. The re-sults are consistent with our model. We find that primary earners in couples are more strongly self-selected with respect to income than single persons. This novel result counters the intuition that family ties weaken self-selection.

We review the literature on recent demographic changes in Europe, focusing on two of the main challenges brought about by an ageing population: severe labor shortages in many sectors of the economy and growing pressures on both health and welfare systems. We discuss how and to what extent migration can contribute to address these challenges both from a short and a long term perspective. Finally, we identify several areas in which more research is needed to help devising more effective policies to cope with a greying society.

This paper contributes to the analysis of the integration of immigrants in the Canadian labour market by focusing in two relatively new dimensions. We combine the large samples of the restricted version of the Canadian Census (1991-2006) with both a new measure of linguistic proximity of the immigrant’s mother tongue to that of the destination country, and with information of the occupational skills embodied in the jobs immigrants hold. This allows us to assess the role that language plays in the labour market performance of immigrants and to better study their career progression relative to the native born. Weekly wage differences between immigrants and the native born are driven mostly by penalties associated with immigrants’ lower returns to social skills, but not to analytical or manual skills. Interestingly, low linguistic proximity between origin and destination language imposes larger wage penalties to the university-educated, and significantly affects the status of the jobs they hold. The influence of linguistic proximity on the skill content of jobs immigrants hold over time also varies by the educational level of the migrant. We also show that immigrants settling in Quebec and whose mother tongue is close to French have similar or better labour market outcomes (relative to native-born residents in Quebec) than immigrants with close linguistic proximity to English settling outside Quebec (relative to native born residents in the rest of Canada). However, since wages in Quebec are lower than elsewhere, immigrants in Quebec earn less in absolute terms than those residing elsewhere.

We provide an explanation for the large spatial wage disparities and low male migration in India based on the trade-off between consumption-smoothing, provided by caste-based rural insurance networks, and the income-gains from migration. Our theory generates two key empirically-verified predictions: (i) males in relatively wealthy households within a caste who benefit less from the redistributive (surplus-maximizing) network will be more likely to migrate, and (ii) males in households facing greater rural income-risk (who benefit more from the insurance network) migrate less. Structural estimates show that small improvements in formal insurance decrease the spatial misallocation of labor by substantially increasing migration.

We show that the Roy model has more precise predictions about the self-selection of migrants than previously realized. The same conditions that have been shown to result in positive or negative selection in terms of expected earnings also imply a stochastic dominance relationship between the earnings distributions of migrants and non-migrants. We use the Danish full population administrative data to test the predictions. We find strong evidence of positive self-selection of emigrants in terms of pre-emigration earnings: the income distribution for the migrants almost stochastically dominates the distribution for the non-migrants. This result is not driven by immigration policies in destination countries. Decomposing the self-selection in total earnings into self-selection in observable characteristics and self-selection in unobservable characteristics reveals that unobserved abilities play the dominant role.

This paper analyses the relation between individual migrations and the risk attitudes of other household members when migration is a household decision. We develop a simple model that implies that which members migrate depends on the distribution of risk attitudes among all household members, and that the risk diversification gain to other household members may induce migrations that would not take place in an individual framework. Using unique data for China on risk attitudes of internal (rural-urban) migrants and the families left behind, we empirically test three key implications of the model: (i) that conditional on migration gains, less risk averse individuals are more likely to migrate; (ii) that within households, the least risk averse individual is more likely to emigrate; and (iii) that across households, the most risk averse households are more likely to send migrants as long as they have at least one family member with sufficiently low risk version. Our results not only provide strong evidence that migration decisions are taken on a household level but also that the distribution of risk attitudes within the household affects whether a migration takes place and who will emigrate.

The H-1B program allows highly-educated foreign-born labor to temporarily work in the United States. Quotas restrict the number of labor force entrants, however. In many years, all available work permits were allocated by random lottery. This paper argues that an alternative distribution method based upon ability would increase output, output per worker, and wages paid to less-educated workers. Baseline estimates suggest that a change in allocation policy could result in a $26.5 billion gain for the economy over a six year period. This estimate grows when H-1B demand rises.

We analyze the effect of immigrants’ legal status on their consumption behavior using unique survey data that samples both documented and undocumented immigrants. To address the problem of sorting into legal status, we propose two alternative identification strategies as exogenous source of variation for current legal status: First, transitory income shocks in the home country, measured as rainfall shocks at the time of emigration. Second, amnesty quotas that grant legal residence status to undocumented immigrants. Both sources of variation create a strong first stage, and – although very different in nature – lead to similar estimates of the effects of illegal status on consumption, with undocumented immigrants consuming about 40 percent less than documented immigrants, conditional on background characteristics. Roughly one quarter of this decrease is explained by undocumented immigrants having lower incomes than documented immigrants. Our findings imply that legalization programs may have a potentially important effect on immigrants’consumption behavior, with consequences for both the source and host countries.

We analyze the effects of the increase in China’s import competition on Mexican domestic and international migration. We exploit the variation in exposure to competition from China, following its accession to the WTO in 2001, across Mexican municipalities and estimate the effect of international competition on the individual decision to migrate. Controlling for individual and municipality features, we find that individuals living in municipalities more exposed to Chinese import competition are more likely to migrate to other municipalities within Mexico, while a negative effect is found on the decision to migrate to the US. In particular, we find that Chinese import competition reduces migrants’ negative self-selection: the rising international competition lowers the likelihood of low-educated, low-income people to migrate to the US, by making them more financially constrained.

For-profit firms are limited in their ability to hire new, foreign-born, highly-educated workers after quotas on H-1B work permits are met each year, though they are able to hire existing H-1B workers. Universities and other non-profit research institutions do not face the same restrictions. Using difference in- difference methodology, this paper estimates the marginal value of an accepted H-1B job offer — in the form of wages — at for-profit firms after quotas have been met. Lower-bound estimates suggest a 1% wage premium with the largest differences occurring in the first month after meeting the quota. At least some of these effects are attributable to wage increases within narrowly-defined groups of workers during years in which available H-1B permits are quickly exhausted. These results provide indirect evidence that H-1B workers are imperfectly substitutable with other labor sources.

We assess the role of ethnic ties in the diffusion of technical knowledge by means of a database of patent filed by US-resident inventors of foreign origin, which we identify through name analysis. We consider ten important countries of origin of highly skilled migration to the US, both Asian and European, and test whether foreign inventors’ patents are disproportionately cited by: (i) co-ethnic migrants (“diaspora” effect); and (ii) inventors residing in their country of origin (“brain gain” effect). We find evidence of the diaspora effect for Asian countries, but not for European ones, with the exception of Russia. Diaspora effects do not translate necessarily into a brain gain effect, most notably for India; nor brain gain occurs only in presence of diaspora effects. Both the diaspora and the brain gain effects bear less weight than other knowledge transmission channels, such as co-invention networks and multinational companies.

We document the educational integration of immigrant children with a focus on the link between family size and educational decisions and distinguishing particularly between firstand second-generation immigrants and between source country groups. First, for immigrant adolescents, we show family-size adjusted convergence to almost native levels of higher education track attendance from the first to the second generation of immigrants. Second, we find that reduced fertility is associated with higher educational outcomes for immigrant children, possibly through a quantity-quality trade-off. Third, we show that between one third and the complete difference in family-size adjusted educational outcomes between immigrants from different source countries or immigrant generations can be explained by parental background. This latter holds true for various immigrant groups in both France and Germany, two major European economies with distinct immigration histories.

Using longitudinal data on the universe of workers in Denmark during the period 1991-2008 we track the labor market outcomes of low skilled natives in response to an exogenous inflow of low skilled immigrants. We innovate on previous identification strategies by considering immigrants distributed across municipalities by a refugee dispersal policy in place between 1986 and 1998. We find that an increase in the supply of refugee-country immigrants pushed less educated native workers (especially the young and low-tenured ones) to pursue less manual-intensive occupations. As a result immigration had positive effects on native unskilled wages, employment and occupational mobility.

A controversial issue in the US is how to reduce the number of illegal immigrants and what effect this would have on the US economy. To answer this question we set up a two-country model with search in labor markets and featuring legal and illegal immigrants among the low skilled. We calibrate it to the US and Mexican economies during the period 2000-2010. As immigrants, especially illegal ones, have a worse outside option than natives their wages are lower. Hence their presence reduces the labor cost of employers who, as a consequence, create more jobs per unemployed when there are more immigrants. Because of such effect our model shows that increasing deportation rates and tightening border control weakens the low-skilled labor markets, increasing unemployment of native low skilled. Legalization, instead decreases the unemployment rate of low-skilled natives and it increases income per native.

Many immigrants in the Netherlands have poor Dutch language skills. They face problems in speaking and reading Dutch. Our paper investigates how these problems affect their labor market performance in terms of employment, hours of work and wages. We find that for female immigrants language problems have significantly negative effects on hourly wages but not on employment probability and hours of work. For male immigrants language problems do not affect employment probability, hours of work or hourly wages.

The evidence on the impact of return migration on the sending country is rather sparse, though growing. The contribution of this paper is in addressing various selectivity problems whilst quantifying the impact of return migration on wages of returnees using non-experimental data. Using Egyptian household level survey data, I estimate the wages of return migrants controlling for several selectivity biases arising from emigration choice, return migration choice, labor force participation choice and occupational choice following return. The findings provide strong evidence that overseas temporary migration results in a wage premium upon return, even after controlling for the various potential selection biases. However the estimates underscore the significance of controlling for both emigration and return migration selections. Ignoring the double selectivity in migration would overestimate the impact of return migration on the wage premium of returnees, as migrants are positively selected relative to non-migrants, but returnees are negatively selected amongst migrants.

Many migrations are temporary – a fact that has often been ignored in the economic literature on migration. Such omission may be serious in that expected migration temporariness can impart a distinct dynamic element to immigrants’ economic behavior, generating possible consequences for non-migrants in both home and host countries. In this paper we provide a thorough examination of the various aspects of temporary migrations that matter for the analysis of economic phenomena. We demonstrate the extent of temporary migrations in population movements. We show how temporariness can affect the various economic choices and how better data have improved both the measurement of nonpermanent migrations and the analyses of various aspects of migrant behavior. We propose a general theoretical framework for modeling temporary migration decisions, based on which we outline the various motives for temporariness while simultaneously reviewing related literature and available data sources. We discuss the possible consequences of migration temporariness for non-migrants in both home and host countries.

Cultural diversity – in various forms – has in recent years turned into a prominent and relevant research and policy issue. There is an avalanche of studies across many disciplines that measure and analyse cultural diversity and its impacts. Based on different perspectives and features of the available data, a great variety of diversity indicators have emerged. The present paper aims to highlight some critical issues involved in applying such measures of cultural diversity. A selection of commonly used or recently advocated measures are reviewed. Measures of population diversity can be calculated at different spatial scales and used to analyse spatio-temporal heterogeneity. Additionally, there is a growing interest in measuring spatial dependence, particularly in the form of segregation or clusters. We conclude that there will be in the future considerable scope for adopting multidimensional and cultural distance-weighted measures of diversity. Such measures will be increasingly calculated by means of rich geo-referenced longitudinal micro data. However, adopted measures must be better motivated by behavioural theories. Further research on the determinants and impacts of observed measures of diversity is also likely to be fruitful, particularly in a dynamical setting.

Economic outcomes are compared for university graduates in Israel belonging to four different ethnic groups. A unique dataset is used that includes all individuals who graduated with a first degree from universities and colleges in Israel between the years 1995 and 2008 and which tracks them for up to 10 years from the year they graduated. The main finding is that education and experience appear to have a strong effect on earnings in the long run and that an ethnic group can improve its position relative to specific groups while it has no effects relative to other groups.

Many U.S. businessmen are vocally in favor of an increase in the number of H-1B visas. Is there systematic evidence that this would positively affect firms' productivity, sales, employment or profits? To address these questions we assemble a unique dataset that matches all labor condition applications (LCAs) - the first step towards H-1B visas for skilled foreign-born workers in the U.S. - with firm-level data on publicly traded U.S. firms (from Compustat). Our identification is based on the sharp reduction in the annual H-1B cap that took place in 2004, combined with information on the degree of dependency on H-1B visas at the firm level as in Kerr and Lincoln (2010). The main result of this paper is that if the cap on H-1B visas were relaxed, a subset of firms would experience gains in average labor productivity, firm size, and profits. These are firms that conduct R&D and are heavy users of H-1B workers - they belong to the top quintile among filers of LCAs. These empirical findings are consistent with a heterogeneous- firms model where innovation enhances productivity and is subject to fixed costs.

Recently, Constant, Gataullina, and Zimmermann (2009) established a new method to measure ethnic identity which they called the "ethnosizer". Using information on an individual's language, culture, social interactions, history of migration, and ethnic self-identification, the method classifies that individual into one of four states: assimilation, integration, separation or marginalization. A large body of literature has emerged examining the effects of immigrants' characteristics (age, gender, education, religion, etc.) on their ethnic identity using the ethnosizer. This note presents a basic theoretical framework to shed light on the vast collection of empirical results obtained on this topic.

This paper investigates the economic returns to language skills and bilingualism. The analysis is staged in Kazakhstan, a multi-ethnic country with complex ethnic settlement patterns that has switched its official state language from Russian to Kazakh. Using two newly assembled data sets, we find negative returns to speaking Kazakh and a negative effect of bilingualism on earnings while Russian was the official state language in the 1990s. Surprisingly, the Kazakh language continues to yield a negative wage premium 13 years after it has been made official state language. While we do neither find evidence for an ethnically segmented labor market nor for reverse causality, the low economic value of the Kazakh language can be explained by the comparatively poor quality of schools with Kazakh as language of instruction. Based on PISA data, we illustrate that scholastic achievements are substantially lower for pupils taught in Kazakh, despite the official support for the titular language. Our results suggest that switching the official state language without appropriate investments in school resources is unlikely to cure the economic disadvantage of a previously marginalized language.

Programs aimed at reducing the presence of unauthorised immigrants are often at the core of the migration policy debate in host countries. In recent years, a growing body of empirical literature has attempted to understand the effect of lacking legal status on immigrants' outcomes and behaviour. The main difficulties in this field are the scarcity of data and the identification challenge posed by endogenous selection into legal status. The vast majority of these articles have therefore used amnesty programs (or similar policy changes) to establish causal relationships. In this paper, we propose a first systematic review of the empirical literature for the US and Europe on the impact of legal status on different immigrants' outcomes. We then present some new evidence of the relationship between labour market outcomes and legal status in the Italian context. In our empirical analysis, we first provide some descriptive evidence on differences in the outcomes for groups with different residence statuses, and we then exploit a specific amnesty programme to produce causal estimates of the impact of legal status. Our results confirm previous findings in the literature and show that the design of the specific amnesty analysed matters in shaping its effects.

International migration offers individuals and their families the potential to experience immediate and large gains in their incomes, and offers a large number of other positive benefits to the sending communities and countries. However, there are also concerns about potential costs of migration, including concerns about trafficking and human rights, a desire for remittances to be used more effectively, and concerns about externalities from skilled workers being lost. As a result there is increasing interest in policies which can enhance the development benefits of international migration and mitigate these potential costs. We provide a critical review of recent research on the effectiveness of these policies at three stages of the migration process: pre-departure, during migration, and directed towards possible return. The existing evidence base suggests some areas of policy success: bilateral migration agreements for countries whose workers have few other migration options, developing new savings and remittance products that allow migrants more control over how their money is used, and some efforts to provide financial education to migrants and their families. Suggestive evidence together with theory offers support for a number of other policies, such as lowering the cost of remittances, reducing passport costs, offering dual citizenship, and removing exit barriers to migration. Research offers reasons to be cautious about some policies such as enforcing strong rights for migrants like high minimum wages. Nevertheless, we find the evidence base to be weak for many policies, with no reliable research on the impact of most return migration programs, nor for whether countries should be trying to induce communal remitting through matching funds.

Several post-Soviet states have introduced policies to improve the relative economic, political or social position of formerly disadvantaged populations. Using one example of such policies – “Kazakhisation” in Kazakhstan – we investigate their impact on the comparative earnings of two directly affected groups, ethnic Russians and ethnic Kazakhs. Oaxaca decompositions show that Kazakhs are better endowed with income generating characteristics but receive lower returns to these characteristics than Russians. The second effect dominates and Kazakhs have comparatively lower average living standards. While “Kazakhisation” may have been successful in a narrow sense – i.e., by empowering Kazakhs to take on leading positions in the public sector – more broadly it as been a self-defeating policy as it has pushed ethnic Russians into jobs that often evolved into positions that (at least in monetary terms) are superior now to those held by Kazakhs.

This paper estimates the effect of immigration on native wages at the national level taking into account the endogenous allocation of immigrants across skill cells. Time-varying exogenous variation across skill cells for a given country is provided by interactions of push factors, distance, and skill cell dummies: distance mitigates the effect of push factors more severely for less educated and middle experienced. Because the analysis focuses on the United States and Canada, I propose a two-stage approach (Sub-Sample 2SLS) that estimates the fiist stage regression with an augmented sample of destination countries, and the second stage equation with the restricted sub-sample of interest. I derive asymptotic results for this estimator, and suggest several applications beyond the current one. The empirical analysis indicates a substantial bias in estimated OLS wage elasticities to immigration. Sub-sample 2SLS estimates average - 1:2 and are very stable to the use of alternative instruments.

Despite extensive recent advances in the empirical and theoretical study of migration, certain critical areas in the analysis of European migration remain relatively underdeveloped both theoretically and empirically. Specifically, we lack studies that both incorporate an origin comparison and trace processes of intergenerational transmission across migrants over multiple generations and incorporating family migration trajectories. This paper outlines the development, data and design of such a study, the 2000 Families study, framed within a theoretical perspective of ‘dissimilation’ from origins and over generations. We term the study an origins-of-migration study, in that it captures the country of origin, the family origins and potentially the originating causes of migration processes and outcomes. The resulting data comprised nearly 2,000 migrant and non-migrant Turkish families with members across three or more generations, covering. 50,000 individuals. We reflect on the potential of this study for migration research.

We use the confidential files of the 1991-2006 Canadian Census, combined with information from O*NET on the skill requirements of jobs, to explore whether Canadian immigrant women behave as secondary workers, remaining marginally attached to the labour market and experiencing little career progression over time. Our results show that the labor market patterns of female immigrants to Canada do not fit the profile of secondary workers, but rather conform to patterns recently exhibited by married native women elsewhere, with rising participation (and wage assimilation). At best, only relatively uneducated immigrant women in unskilled occupations may fit the profile of secondary workers, with slow skill mobility and low-status job-traps. Educated immigrant women, on the other hand, experience skill assimilation over time: a reduction in physical strength and an increase in analytical skills required in their jobs relative to those of natives.

This paper studies asymmetry of information and transfers within a unique data set of 712 extended family networks from Tanzania. Using cross-reports on asset holdings, we construct measures of misperception of income among all pairs of households belonging to the same network. We show that there is significant asymmetry of information and no evidence of major systematic over-evaluation or under-evaluation of income in our data, although there is a slight over-evaluation on the part of migrants regarding non-migrants. We develop a static model of asymmetric information that contrasts altruism, pressure and exchange as motives to transfer. The model makes predictions about the correlations between misperceptions and transfers under these competing explanations.Testing these predictions in the data gives support to the model of transfers under pressure or an exchange motive with the recipient holding all the bargaining power.

Surveying recently arrived immigrants in countries lacking a population register poses many challenges. We describe our adaptation of Respondent Driven Sampling, a chain-referral technique, to sample migrants from Pakistan and Poland who had arrived in the UK within the previous 18 months. Specifically, we discuss issues around connectedness, privacy, clustering, and motivation, central to the implementation of RDS. We outline techniques adopted and evaluate their success. We conclude that RDS is unlikely to be suitable for accessing newly arrived migrants. However, in the absence of registers which can capture populations at point of entry there are no obvious alternatives.

We focus on high school dropout rate among male and female immigrant children. We consider the relationship between the dropout rate and age of arrival of the immigrants. Using repeated cross sectional data from the Israeli Labor Force Surveys of 1996-2011 we show that the share of high school dropouts among immigrant children who arrived from the Former Soviet Union during 1989-1994 is at least as double than among natives in the same age group. Further, we show that among immigrant youth there is a monotonic negative relation between age at arrival and the share of high school dropouts. To understand our results we present a theoretical framework that links between age at arrival in the host country, language proficiency, quality of education and wages.

This paper address the question whether ethnic diversity in school classes in the context of major cities and metropolises, where children from an early age grew up with the phenomenon of ethnic diversity, has a positive effect on the educational performance of migrant pupils. We use PISA 2006 data with 8,521 immigrant students from 35 origin countries, living in 15 destination countries, and all 72,329 native students in these countries. Native students and students with an immigrant background have been analyzed separately, using a multilevel analysis. We find that the effect of school ethnic diversity outside cities is quite negative on the educational performance of migrant and native pupils. In cities the effect of school ethnic diversity is smaller but still negative for both migrant and native pupils. But in large cities the effect of school ethnic diversity on educational performance is positive for both migrant and native pupils.

I document that couples are more likely to migrate if household income is disproportionally due to one partner, and that families react equally strong to a male and female relative earnings advantage. A unitarian model of family migration in which families may discount wives’ private gains is used to derive testable implications regarding the type of couples that select into migrating. The empirical tests show that gender-neutral family migration cannot be rejected against the alternative of husband-centered migration. The lower response of family migration to the human capital held wives than the human capital of husbands, documented in the literature, may be attributed to more intense colocation problems and lower income among female-headed households. The more severe colocation problem stems from stronger educational homogamy among highly educated women relative to highly educated men. The results hold for internal as well as international migration of couples

This paper analyses the effect of local crime rates on residents’ mental health. Using longitudinal information on individuals’ mental well-being, we address the problem of sorting and endogenous moving behaviour. We find that crime causes considerable mental distress for residents, mainly driven by property crime. Effects are stronger for females, and mainly related to depression and anxiety. The distress caused by one standard deviation increase in local crime is 2-4 times larger than that caused by a one standard deviation decrease in local employment, and about one seventh of the short-term impact of the 7 July 2005 London Bombings.

Using administrative panel data, this paper presents a comprehensive empirical analysis of the return of recent foreign students in the Netherlands. We focus on how individual labour market changes and marriage formation influence their decision to leave. Our model allows for correlated unobserved heterogeneity across the migration, the labour market and the marriage formation processes. The large size of the data permits us to stratify the analysis by five groups based on the country of birth. The empirical analyses reveal that employment hardly affects return behaviour of students and unemployment induces them to leave. Marriage in the Netherlands makes the students more prone to stay. The size of the impact of these life course experiences on return differs by income, age at entry, business cycle and gender.

Using longitudinal data from the date of arrival, we study long‐term labor market and social insurance outcomes for all major immigrant cohorts to Norway since 1970. Immigrants from highincome countries performed as natives, while labor migrants from low‐income source countries had declining employment rates and increasing disability program participation over the lifecycle. Refugees and family migrants assimilated during the initial period upon arrival, but labor market convergence halted after a decade and was accompanied by rising social insurance rates. For the children of labor migrants of the 1970s, we uncover evidence of intergenerational assimilation in education, earnings and fertility.

This paper documents the influence of diaspora networks of highly-skilled individuals – i.e., inventors – on international technological collaborations. Using gravity models, it studies the determinants of the internationalization of inventive activity between a group of industrialized countries and a sample of developing and emerging economies. The paper examines the influence exerted by skilled diasporas in fostering cross-country co-inventorship as well as R&D offshoring. The study finds a strong and robust relationship between inventor diasporas and different forms of international co-patenting. However, the effect decreases with the level of formality of the interactions. Interestingly, some of the most successful diasporas recently documented – namely, Chinese and Indian ones – do not govern the results.

Faced with diminishing prospects for a comprehensive immigration reform at the federal level, states have started to take immigration matters into their own hands. For example, many states have been mandating the use of employment verification (E-Verify) systems to confirm work eligibility. Some of the consequences of these E-Verify mandates remain unclear. In this paper, we focus on the effect of anti-illegal immigrant laws on foreign investment. Specifically, we exploit the state-level and time variation in the enactment and implementation of E-Verify mandates to explore if punitive measures against the firm impact states’ ability to attract foreign direct investment. We quantify foreign direct investment through the employment by U.S. affiliates owned by foreign firms. Our results suggest that E-Verify mandates adversely affect employment among these majority-owned U.S. affiliates and, therefore, work against states trying to attract foreign direct investment.

We investigate the effectiveness of Arizona’s omnibus immigration law SB1070, which made it a misdemeanor crime for an alien to not carry proper documentation and asked police to determine the immigration status of any person suspected of being an illegal alien during a lawful stop. We find that SB1070’s enactment coincided with the stalling to slight recovery of the share of non-citizen Hispanics in Arizona three years after the enactment of an employment verification mandate to all employers. Yet, its effectiveness in reducing the share of likely unauthorized immigrants has been minimal and questions the merit of the law.

Cultural diversity is a complex and multi-faceted concept. Commonly used quantitative measures of the spatial distribution of culturally-defined groups – such as segregation, isolation or concentration indexes – are often only capable of identifying just one aspect of this distribution. The strengths or weaknesses of any measure can only be comprehensively assessed empirically. This paper provides evidence on the empirical properties of various spatial measures of cultural diversity by using Monte Carlo replications of agent-based modeling (MC-ABM) simulations with synthetic data assigned to a realistic and detailed geographical context of the city of Amsterdam. Schelling’s classical segregation model is used as the theoretical engine to generate patterns of spatial clustering. The data inputs include the initial population, the number and shares of various cultural groups, and their preferences with respect to co-location. Our MC-ABM data generating process produces output maps that enable us to assess the performance of various spatial measures of cultural diversity under a range of demographic compositions and preferences. We find that, as our simulated city becomes more diverse, stable residential location equilibria are only possible when people, particularly minorities, become more tolerant. We test whether observed measures can be interpreted as revealing unobserved preferences for co-location of individuals with their own group and find that the segregation and isolation measures of spatial diversity are shown to be non-decreasing in increasing preference for within-group co-location, but the Gini coefficient and concentration measures are not.

This study investigates the effects of the macroeconomic context on attitudes to immigration. Earlier studies do in most cases not provide significant empirical support for the existence of important such effects. In this article it is argued that this lack of consistent evidence is mainly due to the cross-national setup of these studies being vulnerable to estimation bias caused by country-specific factors. The present study instead analyzes attitude variation within countries over time, using parallel time series from 23 European countries that were observed biannually 2002-2012 in the European Social Survey. The results provide firm empirical support in favor of macroeconomic variation importantly affecting attitudes to immigration. As an illustration, the estimates indicate that the number of individuals in the average European country in 2012 who were against all immigration from poorer countries or of foreign ethnicities was 40% higher than it would have been if macroeconomic conditions in that year had been as good as they were in 2006.

Women who want to work often face many more hurdles than men. This is true in Tajikistan where there is a large gender gap in labour force participation. We highlight the role of two factors – international migration and education – on the labour force participation decision and its gender gap. Using probit and decomposition analysis, our investigation shows that education and migration have a significant association with the gender gap in labour force participation in Tajikistan. International emigration from Tajikistan, in which approximately 93.5% of the participants are men, reduces labour force participation by men domestically; increased female education, especially at the university and vocational level, increases female participation. Both women acquiring greater access to education and men increasing their migration abroad contribute to reducing the gender gap.

Based on individual longitudinal data, we examine the evolution of employment and earnings of post‐EU accession Eastern European labour immigrants to Norway for a period of up to eight years after entry. We find that the migrants were particularly vulnerable to the negative labour demand shock generated by the financial crisis. During the winter months of 2008/09, the fraction of immigrant men claiming unemployment insurance benefits rose from below 2 to 14 per cent. Some of this increase turned out to be persistent, and unemployment remained considerably higher among immigrants than natives even three years after the crisis. Although we find that negative labour demand shocks raise the probability of return migration, the majority of the labour migrants directly affected by the downturn stayed in Norway and claimed unemployment insurance benefits.

While there is considerable interest in understanding the climate-migration relationship, particularly in the context of concerns about global climatic change, little is known about underlying mechanisms. We analyze a unique and extensive set of panel data characterizing annual bilateral international migration flows from 163 origin countries to 42 OECD destination countries covering the last three decades. We find a positive and statistically significant relationship between temperature and international outmigration only in the most agriculture-dependent countries, consistent with the widely-documented adverse impact of temperature on agricultural productivity. In addition, migration flows to current major destinations are especially temperature-sensitive. Policies to address issues related to climate-induced international migration would be more effective if focused on the agriculture-dependent countries and especially people in those countries whose livelihoods depend on agriculture.

Does return migration affect entrepreneurship? This question has important implications for the debate on the economic development effects of migration for origin countries. The existing literature has, however, not addressed how the estimation of the impact of return migration on entrepreneurship is affected by double unobservable migrant self-selection, both at the initial outward migration and at the final inward return migration stages. This paper uses a representative household survey conducted in Mozambique in order to address this research question. We exploit variation provided by displacement caused by civil war in Mozambique, as well as social unrest and other shocks in migrant destination countries. The results lend support to negative unobservable self-selection at both and each of the initial and return stages of migration, which results in an under-estimation of the effects of return migration on entrepreneurial outcomes when using a ‘naïve’ estimator not controlling for self-selection. Indeed, ‘naïve’ estimates point to a 13 pp increase in the probability of owning a business when there is a return migrant in the household relative to non-migrants only, whereas excluding the double effect of unobservable self-selection, this effect becomes significantly larger - between 24 pp and 29 pp, depending on the method of estimation and source of variation used.

Despite the enduring appeal of fair trade activism, little evidence exists on its effectiveness in improving producer welfare. This paper provides evidence on the direct effects of a fair trade premium on its target beneficiaries, using the case of the Penny-Per-Pound, a program that increased the piece-rate wages received by tomato pickers in Florida. It highlights that in output-constraint settings, common in agriculture, a piece-rate compensation scheme can result in externalities among workers. By inadvertently incentivizing the workers to increase their effort whereas the total output is fixed, the program amplified the externality and generated unforeseen risks for worker displacement.

This paper estimates the causal effect of the prospect of legal status on the employment outcomes of undocumented immigrants. Our identification strategy exploits a natural experiment provided by the 2002 amnesty program in Italy that introduced an exogenous discontinuity in eligibility based on date of arrival. We find that the prospect of legal status significantly increases the employment probability of immigrants that are potentially eligible for the amnesty relative to other undocumented immigrants. The size of the estimated effect is equivalent to about two thirds of the increase in employment that undocumented immigrants in our sample normally experience in their first year after arrival in Italy. These findings are robust to several falsification exercises.

We use a new dataset on eight Italian cities and a novel identification strategy to analyze the relationship between the employment status of migrants and the percentage of migrants living nearby. Our data contain information at the very local level (i.e. the residential block) and are representative of the population of both legal and illegal migrants. Identification is based on an instrumental variable strategy that exploits the physical characteristics of the local buildings as a source of exogenous variation in the incidence of migrants in each location. We find evidence that migrants who reside in areas with a high concentration of non-Italians are less likely to be employed compared to similar migrants who reside in more mixed areas. This penalty is higher if the migrants leaving nearby are illegal and it is not mitigated by living close to migrants who are from own's ethnic group nor who are more proficient in the Italian language. The employment prospects of natives do not appear to be affected by the vicinity of migrants.

This paper investigates the effect of the differential pecuniary costs of sons and daughters on fertility decisions. The focus is on dowries in India, which increase the economic returns to sons and decrease the returns to daughters. The paper exploits an exogenous shift in the cost of girls relative to boys arising from a revision in anti-dowry law. The reform is found to have attenuated the widely documented positive correlation between daughters and their parents' fertility. The observed patterns can be explained by a simple model of sequential fertility decisions where the gender composition of children determines future dowry payments.

The expansion of the European Union eastwards in 2004, with an ensuing massive increase in East-West migration from the accession countries has been represented as a new migration system of a kind unique in recent migration history, with its specific features of rights of movement and low mobility and information costs accompanying persistent East-West wage differentials. In principle, it provides an ideal context in which to develop understandings of the ‘new migration’ reflecting complex motivations and migration trajectories as well as chain migration and transnational lives. Despite a rapid expansion of research in this area, new insights into the complexities of mixed migration motivations and migrant heterogeneity have tended to be focused on country-specific qualitative studies. In this paper we utilise a unique, four-country data source covering over 3,500 Poles migrating to Germany, the Netherlands, London and Dublin in 2009-2010, to enable the quantitative characterization of the new migration. Exploiting information on pre-migration experience as well as expressed migration motivations and post-migration structural, subjective and social measures of integration in the receiving country, we conduct a three-stage analysis. First we employ latent class analysis to allocate the migrants to six migrant types. Second, we link these migrant types to pre-migration characteristics and estimate multinomial logit models for class membership. Third, controlling for these pre-migration characteristics we are able to explore how the migrant types are associated with measures of integration. We reveal substantial heterogeneity among migrants and some evolving ‘new’ migrant types alongside more traditional labour migrants. We show how these types are associated with differences in pre-migration human capital, region of origin and employment experience and with post-migration social and subjective integration in receiving societies.

This paper aims to isolate the ethnic gap on the labor market that can be attributed to ethnicity and not to differences in individual characteristics or residential location. Controlling for residential location is important as ethnic minorities often live in distressed neighborhoods. It is also challenging because spatial sorting is likely to differ across ethnicities because of labor-or housing-market discrimination. This paper shows that controlling for neighborhoods and observed individual characteristics fails to provide a consistent estimate for the component of the gap accountable to ethnicity only. However, under some assumptions, the quantity of interest is set identified even when heterogeneous sorting patterns across ethnicities are allowed for and the set estimate can still be informative. A two-step estimation method is presented and applied to explain the ethnic employment differential in France, between French individuals of North African ancestry and those with non-immigrant parents. Most of the gap is not due to differences in residential location or individual characteristics, but rather to ethnicity itself.

The question of whether migration can be an equilibrating force in the labour market is an important criterion for an optimal currency area. It is of particular interest currently in the context of high and rising levels of labour market disparities, in particular within the Eurozone where there is no exchange-rate mechanism available to play this role. We shed some new light on this question by comparing pre- and post-crisis migration movements at the regional level in both Europe and the United States, and their association with asymmetric labour market shocks. We find that recent migration flows have reacted quite significantly to the EU enlargements in 2004 and 2007 and to changes in labour market conditions,particularly in Europe. Indeed, in contrast to the pre-crisis situation and the findings of previous empirical studies, there is tentative evidence that the migration response to the crisis has been considerable in Europe, in contrast to the United States where the crisis and subsequent sluggish recovery were not accompanied by greater interregional labour mobility in reaction to labour market shocks. Our estimates suggest that, if all measured population changes in Europe were due to migration for employment purposes – i.e. an upper-bound estimate – up to about a quarter of the asymmetric labour market shock would be absorbed by migration within a year. However, in the Eurozone the reaction mainly stems from migration of third-country nationals. Even within the group of Eurozone nationals, a significant part of the free mobility stems from immigrants from third countries who have taken on the nationality of their Eurozone host country.

Some immigrants try to keep their ethnicity hidden while others become ever deeply more mired in their home culture. We argue that among immigrants this struggle manifests itself in the ethnic goods they choose to consume. Different types of ethnic goods have vastly different effects on immigrant assimilation. We develop a simple theoretical model useful for capturing the consequences of this struggle, illustrating it with examples of Central Asian assimilation into the Muscovite economy.

Do migrants send remittances as a way of obtaining insurance? While this motive is theoretically suggested in the literature, the question of identifying this relationship empirically has only begun to be explored. Using a unique representative survey of 1500 immigrants in the Greater Dublin Area, Ireland, we find a positive and signicant relationship between risk aversion and remittance behavior. Risk-averse individuals are more likely to send remittances home and are, on average, likely to remit a higher amount, after controlling for a broad range of individual and group characteristics. Consistent with a purchase of self insurance motive to remit, we also provide evidence of more remittances sent by risk averse immigrants facing higher wage risks and remitting to individuals with more financial resources.

Using a rich, nationally representative data set with a large sample of minorities and matched small area characteristics, we explore differences in life satisfaction for ethnic groups living in UK. We test the hypothesis that minorities will be less satisfied, which will in part be explained by less favourable individual and area contexts, but that living in areas with a larger proportion of own ethnic group promotes well-being. We find that satisfaction is lower among minorities, ceteris paribus, but area concentration is associated with higher life satisfaction for certain groups. We discuss the implications of our findings.

The astonishing transformation of the German economy from the 'sick man of Europe' to a lean and highly competitive economy is predominantly due to the decentralisation of wage bargaining rather than government labour market reforms.

Seasonal worker programs are increasingly seen as offering the potential to be part of international development policy, in addition to the traditional goal of meeting domestic agricultural needs. New Zealand’s Recognised Seasonal Employer (RSE) program is one of the first and most prominent of programs designed with this perspective. This chapter provides a detailed examination of this policy through the first six seasons. It begins by outlining the background to the launch of the program, and key features of how the program operates in practice. This includes the important role of policy facilitation measures taken by national governments and aid agencies. The evolution of the program in terms of worker numbers is then discussed, along with new data on the (high) degree of circularity in worker movements, and new data on (very low) worker overstay rates. This is followed by a summary of the impacts of the program on New Zealand workers and employers: there appears to have been little displacement of New Zealand workers, and new data shows RSE workers to be more productive than local labor, and that workers appear to gain productivity as they return for subsequent seasons. The program has also benefitted the migrants participating in the program, with increases in per capita incomes, expenditure, savings, and subjective well-being, with some evidence of small positive spillover benefits to their communities in the form of public goods. Taken together, this evidence suggests that the RSE program is largely living up to its promise of a “triple win” for migrants, their sending countries in the Pacific, and for New Zealand, and that it is one of the most successful development interventions for which rigorous evidence exists. As such, both development and immigration policy can benefit from learning the lessons of this program.

When Romania and Bulgaria joined the EU in 2007 Sweden was one of two EU15 countries that did not restrict access to its labor market and welfare systems for Romanian and Bulgarian citizens. This article evaluates the net fiscal contribution in 2011 of Romanian and Bulgarian migrants who arrived in Sweden under this migration regime in 2007-2010. The average net contribution is found to be substantially positive: around 30,000 kronor, or one-sixth of public sector turnover per capita. This result is used to discuss expected corresponding net contributions in other EU15 countries, several of which lifted their restrictions on January 1st, 2014. The United Kingdom and Ireland stand out as two countries that unambiguously have reason to expect even more positive contributions.

Diaspora networks provide information to future migrants and influence both their decision to migrate and their success in the host country. While the existing literature explains the effect of networks on migration decisions through the size of the migrant community, we show that the quality of the network is an equally important determinant. We argue that networks that are more integrated in the society of the host country can give more accurate information about job prospects to future migrants. In a decision model with imperfect signalling we show that migrants with access to a better network are more likely to make the right decision - they migrate only if they gain - and they migrate earlier. We test these predictions empirically using data on recent Mexican migrants to the US, and exploit the geographic diffusion of Mexicans since the 1980s as well as the settlement of immigrants that came during the Bracero program in the 1950s to instrument for the quality of networks. The results provide strong evidence that connections to a better-integrated network lead to better outcomes after migration. Yet we find no evidence that the quality of the network affects the timing of migration.

This chapter begins by documenting that temporary migrations are not only very common, but that outmigration of immigrants is selective both in terms of migrants’ individual characteristics and their economic outcomes. We then examine the problems that arise when estimating immigrants’ earnings profiles when outmigration is selective, and discuss the identifying assumptions needed to answer three different questions on immigrants’ earnings careers. We show how better data can help to relax these assumptions, suggest appropriate estimators, and provide an illustration using simulated data. We finally provide an overview of existing papers that use different types of data to address selective outmigration when estimating immigrants’ earnings profiles.

Historical experience suggests that when a period of rising immigration is followed by a sudden slump, this can trigger a policy backlash. This has not occurred in the current recession. This paper examines three links in the chain between the slump and immigration policy. First, although immigration flows have responded to the slump, and immigrants have borne more than their share of the burden, this has done little to protect the employment of non-Immigrants. Second, despite the recession for Europe as a whole, attitudes to immigration have not changed very much, and they have been influenced more by fiscal concerns than by rising unemployment. Third, while far right parties have used the recession to renew the political pressure for tougher immigration policies, governments have been constrained by the composition of immigration and by EU regulation.

International test scores are used to proxy the quality of source country educational outcomes and explain differences in the rate of return to schooling among immigrants in Canada. The average quality of educational outcomes in an immigrant’s source country and the rate of return to schooling in the host country labour market are found to have a strong and positive association. However, in contrast to those who completed their education pre-immigration, immigrants who arrived at a young age are not influenced by this educational quality measure. Also, the results are not much affected when the source country’s GDP per capita and other nation-level characteristics are used as control variables. Together, these observations reinforce the argument that the quality of educational outcomes has explanatory power for labour market outcomes. The effects are strongest for males and for females without children.

Do information flows matter for remittance behavior? We design and implement a randomized control trial to quantitatively assess the role of communication between migrants and their contacts abroad on the extent and value of remittance flows. In the experiment, a random sample of 1,500 migrants residing in Ireland was offered the possibility of contacting their networks outside the host country for free over a varying number of months. We find a sizable, positive impact of our intervention on the value of migrant remittances sent. Our results exclude that the remittance effect we identify is a simple substitution effect. Instead, our analysis points to this effect being a likely result of improved information via factors such as better migrant control over remittance use, enhanced trust in remittance channels due to experience sharing, or increased remittance recipients’ social pressure on migrants.

A growing number of OECD countries are leaning toward adopting quality-selective immigration policies. The underlying assumption behind such policies is that more skill-selection should raise immigrants' average quality (or education level). This view tends to neglect two important dynamic effects: the role of migration networks, which could reduce immigrants' quality, and the responsiveness of education decisions to the prospects of migration. Our model shows that migration networks and immigrants' quality can be positively associated under a set of sufficient conditions regarding the degree of selectivity of immigration policies, the initial pattern of migrants' self-selection on education, and the way time-equivalent migration costs by education level relate to networks. The results imply that the relationship between networks and immigrants' quality should vary with the degree of selectivity of immigration policies at destination. Empirical evidence presented as background motivation for this paper suggests at this is indeed the case.

This paper investigates the effect of early exposure to neighborhood crime on subsequent criminal behavior of youth exploiting a unique natural experiment between 1986 and 1998 when refugee immigrants to Denmark were assigned to neighborhoods quasi-randomly. We find strong evidence that the share of young people convicted for crimes, in particular violent crimes, in the neighborhood increases convictions of male assignees later in life. No such effects are found for other measures of neighborhood crime including the rate of committed crimes. Our findings suggest social interaction as a key channel through which neighborhood crime is linked to individual criminal behavior.

Immigration is commonly considered to be selective of more able individuals. Studies comparing the educational attainment of Mexican immigrants in the United States to that of the Mexican resident population support this characterization. Upward educational attainment biases in both coverage and measurement, however, may be substantial in U.S. data sources. Moreover, differences in educational attainment by place size are very large within Mexico, and U.S. data sources provide no information on immigrants’ places of origin within Mexico. To address these problems, we use multiple sources of nationally-representative Mexican survey data to re-evaluate the educational selectivity of labor-force-age Mexican migrants to the United States over the 1990s and 2000s. We document disproportionately rural and small-urban-area origins of Mexican migrants and a steep positive gradient of educational attainment by place size. We show that together these conditions induced strongly negative educational selection of Mexican migrants throughout the 1990s and 2000s. We interpret this finding as consistent with low returns to the education of unauthorized migrants and few opportunities for authorized migration.

We estimate the crowding out of private transfers caused by 70 y Más –a public assistance program for the rural elderly in Mexico for whom family support is an important source of income. Using data from the Mexican Income and Expenditure Survey and a triple difference approach, we find that the program crowds out private gifts by 37 percent, and it does so mostly by reducing the probability of receiving domestic remittances. As a result, the non-labor income of beneficiaries increases by less than their government transfers. Thus, by reducing their private support to the elderly, domestic donors are dampening the effect of the program, although not completely neutralizing it.

This paper examines changes in public attitudes towards refugees across Britain over almost three decades using data from British Social Attitudes Surveys. It therefore covers the period when immigration as a whole has increased and the number of asylum applications reached their highest levels. The data are examined in periods before and after the rise in asylum applications and from a sub-national perspective because of possible differences in attitudes between areas, as well as in levels and types of inward migration. Overall, the British public appear to have become less tolerant towards refugees. This suggests that rising levels of immigration and asylum, a political discourse which positioned asylum as a particular problem in terms of the management of migration flows and accompanying press coverage have resulted in a hardening of opinions. These changes have occurred despite increased educational attainment amongst the British population, which might be expected to result in more liberal attitudes. The sub-national analysis indicates that people living in London and Scotland display the most tolerant views both before and after the increase in immigration and asylum. However, characteristics such as belonging to an ethnic minority group or possessing a degree, which are higher in London, account for a large portion of the regional variations. Controlling for such factors in regression analysis reduces the differentials relative to London, especially in more recent years.

Do more risk loving migrants opt for self-employment? This is a question especially relevant for policy makers designing selective immigration policies in countries of destination. In order to provide a rigorous answer to it, we use a novel vignette-adjusted measure of risk preferences in the domain of work to investigate the link between risk aversion and entrepreneurship in migrant communities. Using a representative household survey of the migrant population in the Greater Dublin Area, we find a significant negative relationship between risk aversion and entrepreneurship. In addition, our results show that the use of vignettes improves the significance of the results, as they correct for differential item functioning (where respondents interpret the self-evaluation scale in different ways) between entrepreneurs and non-entrepreneurs, and corrects for variation in the use of self-evaluation scales between migrants from different countries of origin.

Guest-worker programs have been providing rapidly growing economies with millions of temporary foreign workers over the last couple of decades. With the duration of stay strictly limited by program rules in most of the host countries and wages paid to guest workers often set at sub-market levels, many of the migrants choose to overstay and seek employment in the underground economy. This paper develops a general-equilibrium model that relates the flow of guest workers transiting to the underground economy to the rules of the program, enforcement measures of the host country and market conditions facing migrants at home and abroad.

The impact of immigration on the public finances is an important influence on public opinion. This paper aims to provide a thorough conceptual survey, pointing out the complexities of a full understanding and the relevance of indirect effects and covering both static perspectives and longer run dynamic issues. It considers simple accounting approaches which are relatively neglectful of behavioural responses but also tries to bring out the complexities in the nature of the relationship between rates of immigration and the public exchequer that come with more sophisticated modelling of its economic effects.

In this paper, we investigate the fiscal impact of immigration on the UK economy, with a focus on the period since 1995. We provide estimates for the overall immigrant population for the period between 1995 and 2012, and for more recent immigrants who arrived since 2000, distinguishing between immigrants from European versus non-European countries. Overall, our findings indicate that EEA immigrants have made a positive fiscal contribution, even during periods when the UK was running budget deficits. This positive contribution is particularly noticeable for more recent immigrants that arrived since 2000 in particular from EEA countries.

We investigate the determinants of giving in a lab-in-the-field experiment with large stakes. Study participants in urban Mozambique play dictator games where their counterpart is the closest person to them outside their household. Dictators share more with counterparts when they have the option of giving in kind (in the form of goods), compared to giving that must be in cash. Qualitative post-experiment responses suggest that this effect is driven by a desire to control how recipients use gifted resources. Standard economic determinants such as the rate of return to giving and the size of the endowment also affect giving, but the effects of even large changes in these determinants are significantly smaller than the effect of the in-kind option. Our results support theories of giving where the utility of givers depends on the composition (not just the level) of gift-recipient expenditures, and givers thus seek control over transferred resources.

Migration contributes to the circulation of goods, knowledge, and ideas. Using community and individual-level data from Moldova, we show that the emigration episode that started in the late 1990s strongly affected political preferences and electoral outcomes in Moldova during the following decade and was eventually instrumental in bringing down the last ruling Communist government in Europe. Our results are suggestive of information transmission and cultural diffusion channels. Identification relies on the quasi-experimental context studied and on the differential effects arising from the fact that emigration was directed both to more democratic Western Europe and to less democratic Russia.

Significant income gains from migrating from poorer to richer countries have motivated unilateral (source-country) policies facilitating labor emigration. However, their effectiveness is unknown. We conducted a large-scale randomized experiment in the Philippines testing the impact of unilaterally facilitating international labor migration. Our most intensive treatment doubled the rate of job offers but had no identifiable effect on international labor migration. Even the highest overseas job-search rate we induced (22%) falls far short of the share initially expressing interest in migrating (34%). We conclude that unilateral migration facilitation will at most induce a trickle, not a flood, of additional emigration.

According to Robert Putnam (2007) ethnic diversity in cities and neighborhoods does not lead to an increase of trust and social capital as previously predicted by intergroup contact theory (Pettigrew, 1998); instead it triggers a reaction of hunkering down that leads to a decrease in trust and social capital of both in-group and out-groups. But what happens if we focus on youngsters that are growing up in a multi-ethnic metropole, that are considering ethnic diversity as a something "normal", and that are bridging their ethnic differences by sharing a common street culture and language? In this article we use data about 905 pupils, 41 classes and 11 schools in a European metropole to confirm the hypothesis that in this specific context ethnic diversity in classrooms does lead to positive effects on educational performance.

The gravity model has provided a tractable empirical framework to account for bilateral flows not only of manufactured goods, as in the case of merchandise trade, but also of financial flows. In particular, recent literature has emphasized the role of information costs in preventing larger diversification of financial investments. This paper investigates the role of migration in alleviating information imperfections between home and host countries. We show that the impact of migration on financial flows is strongest where information problems are more acute (that is, for more informational sensitive investments and between more culturally distant countries) and for the type of migrants that are most able to enhance the flow of information, namely, skilled migrants. We interpret these differential effects as additional evidence pointing to the role of information in generating home-bias and as new evidence of the role of migration in reducing information frictions between countries.

This paper uses several decades of US time-diary surveys to assess the impact of low-skilled immigration, through lower prices for commercial child care, on parental time investments. Using an instrumental variables approach that accounts for the endogenous location of immigrants, we find that low-skilled immigration to the United States has contributed to substantial reductions in the time allocated to basic child care by college-educated mothers of non-school age children. However, these mothers have not reduced the time allocated to more stimulating educational and recreational activities with their children. Understanding the factors driving parental time investments on children is crucial from a child development perspective.

Immigrant populations in many developed democracies have grown rapidly, and so too has an extensive literature on natives’ attitudes toward immigration. This research has developed from two theoretical foundations, one grounded in political economy, the other in political psychology. These two literatures have developed largely in isolation from one another, yet the conclusions that emerge from each are strikingly similar. Consistently, immigration attitudes show little evidence of being strongly correlated with personal economic circumstances. Instead, immigration attitudes are shaped by sociotropic concerns about national-level impacts, whether those impacts are cultural or economic. This pattern of results has held up as scholars have increasingly turned to experimental tests, and it fits the evidence from the United States, Canada, and Western Europe. Still, more work is needed to strengthen the causal identification of sociotropic concerns and to isolate precisely how, when, and why they matter for attitude formation.

Using a simple theoretical model, we show that the level of migration costs relative to wealth determines the form of the relation between income and migration intentions, which can be monotonically decreasing, increasing, or inverse U-shaped. Using unique individual level data, covering three geographic regions—sub-Saharan Africa, Asia, and Latin America—we show that migration intentions do indeed respond to individual wealth, and that the patterns differ across the country groups studied in a manner compatible with the predictions of our model. Further, contentment with various dimensions of local amenities plays an important role for migration decisions.

As recent efforts to reform immigration policy at the federal level have failed, states have started to take immigration matters into their own hands and researchers have been paying closer attention to state dynamics surrounding immigration policy. Yet, to this date, there is not a clear understanding of the consequences of enforcing E-verify on likely unauthorized immigrants and on native-born workers across the United States. This study aims to fill in that gap by analyzing the impact that the enactment of various types of E-verify mandates may have on the employment and wages of these two populations. We find that the enactment of both universal and public-sector only mandates reduce employment of likely unauthorized workers. Meanwhile, employment verification does not affect naturalized Hispanic workers but increases the employment likelihood of native workers. Impacts on wages are positive for likely unauthorized women suggesting a large labor supply reduction. For native-born workers, hourly wages also increase and provide some evidence of substitutability of unauthorized immigrants and non-Hispanic natives.

This article investigates the relationship between migrants' destination choices and the formal labor market access afforded by multiple potential host countries in the context of the EU's eastward enlargement. We use an index of labor market access laws combined with data on migration from new EU member states into the existing states of the EU and EFTA from 2004 through 2010 to test whether (1) migrants are attracted to destinations that give them greater formal labor market access, and (2) migration flows to any given destination are influenced by the labor market policies of competing destinations. Our data support both propositions: Migration between origin/destination pairs was positively associated with the loosening of destination labor market restrictions while negatively associated with the loosening of competing destinations' labor market restrictions. These relationships hold even when economic indicators, social welfare spending, and existing immigrant stocks are modeled. By combining rich EU data with a unique approach to evaluating competing legal regimes, the analysis helps us better understand how law shapes migration in a multi-destination world.

Most migration surveys do not ask about the legal status of migrants due to concerns about the sensitivity of this question. List randomization is a technique that has been used in a number of other social science applications to elicit sensitive information. We trial this technique by adding it to surveys conducted in Ethiopia, Mexico, Morocco and the Philippines. We show how, in principal, this can be used to both give an estimate of the overall rate of illegal migration in the population being surveyed, as well as to determine illegal migration rates for subgroups such as more or less educated households. Our results suggest that there is some useful information in this method: we find higher rates of illegal migration in countries where illegal migration is thought to be more prevalent and households who say they have a migrant are more likely to report having an illegal migrant. Nevertheless, some of our other findings also suggest some possible inconsistencies or noise in the conclusions obtained using this method, so we suggest directions for future attempts to implement this approach in migration surveys.

In this paper we address both the occurrence of single-motherhood among migrant mothers in OECD countries and the effect of living in a single-mother family on the math scores of 15-year old migrant pupils in OECD countries. We use the PISA 2009 data with an international comparative perspective, which contains 14,794 migrant pupils coming from 54 origin countries (grouped into 13 origins regions) and living in 15 OECD destination countries. We select only two-parent families and single-mother families for this analysis. Pupils have a higher risk of living in a single-mother family when one parent was born in the destination country, when they speak the destination language at home, and when they have a low socio-economic status. The risk of single parenthood also coincides with the prevalence of single parenthood in the origin country but does not reflect the prevalence of single parenthood in the destination countries. After controlling for mothers’ socio-economic status and migration history, migrant pupils from single-mother families score 4 point lower on the math test than migrant pupils who live with both parents. This effect does not depend on the prevalence of single parenthood in the origin or the destination country.

Seasonal and temporary migration programs are widely used around the world, yet there is scant evidence as to their development impacts. Absent such evidence, it is difficult to evaluate whether the proliferation of temporary worker programs in recent years is a useful development. This article reviews studies that attempt to measure impacts of seasonal and temporary migration with a particular focus on evidence from the Pacific and Southeast Asia.

We try to explain the differences between the performance (in both reading and math) of 8430 15-year-old daughters and 8526 15-year-old sons in 17 Organisation for Economic Cooperation and Development destination countries across Europe and Oceania with the PISA 2009 data from 45 origin countries or regions. In addition to the level of societal gender equality of the origin and destination countries (the gender empowerment measure, or GEM) we use macro indicators of the educational systems, economic development, and religions of the countries of origin. We find that migrant daughters from countries with higher levels of gender equality have higher reading scores than comparable migrant sons (but this is not the case for math scores). In addition, the higher the level of gender equality in the destination countries, the lower the reading and math scores of both the male and female migrants’ children in their destination countries. Further analyses suggest that the difference between the levels of gender equality, rather than the levels themselves, of the origin and destination countries explains more of the educational performance of both female and male migrant pupils. Our results also show that the low level of gender equality in Islamic origin countries is a sufficient explanation of the low educational performance of Islam male and female migrants’ pupils. Finally, migrants’ daughters seem to perform slightly better educationally than comparable migrants’ sons.

In this paper, we explore employers’ decisions regarding the employment of legal and illegal immigrants in the presence of endogenous adjustment cost, minimum wages and an enforcement budget. We show that increasing the employment of legal foreign workers will increase the number of illegal immigrants which will replace the employment of the local population and thus creating illegal migration.

This paper uses a unique survey to examine the nature and extent of knowledge flows that result from the international mobility of researchers whose initial education was in small island countries. Current migrants produce substantially more research than similar-skilled return migrants and non-migrants. Return migrants have no greater research impact than individuals who never migrate but are the main source of research knowledge transfer between international and local researchers. Our results contrast with previous claims in the literature that too few migrant researchers ever return home to have much impact, and that there is no productivity gain to researchers from migration.

The diversity of people has economic costs and benefits. Using recent immigration data from 195 countries, we propose an index of diversity based on people’s birthplaces. This new index is decomposed into a ”size” (share of foreign born) and a ”variety” (diversity of immigrants) component and is available for 1990 and 2000 and for the overall as well as for the high (workers with college education) and low-skill fractions of the workforce. We show that birthplace diversity is largely uncorrelated with ethnic and linguistic fractionalization and that – unlike fractionalization – it is positively related to economic development even after controlling for education, institutions, ethnic and linguistic fractionalization, trade openness, geography, market size, and origin- effects. This positive association appears particularly strong for the diversity of skilled immigrants in richer countries. We make progress towards addressing endogeneity by specifying a gravity model to predict the diversity of immigration based on exogenous bilateral variables. The results are robust across various OLS and 2SLS specifications.

We study the effects of performance bonuses in immigrant language training for adults. A Swedish policy pilot conducted in 2009–2010 gave a randomly assigned group of municipalities the right to grant substantial cash bonuses to recently arrived migrants. The results suggest substantial effects on average student achievement. But these were fully driven by metropolitan areas; in other parts of Sweden performance was unaffected. The relative effects were larger for younger students but similar for men and women, and present for migrants from different parts of the world. The bonus had a less clear impact on enrollment, but there are indications that it may have increased the probability of progressing to bonus-awarding courses in metropolitan areas.

The recent impetus of tougher immigration-related measures passed at the state-level raises concerns about the impact of such measures on the migration experience, trajectory and future plans of unauthorized immigrants. In a recent and unique survey of Mexican unauthorized immigrants interviewed upon their voluntary return or deportation to Mexico, almost a third reports experiencing difficulties in obtaining social or government services, finding legal assistance or obtaining health care services. Additionally, half of them report fearing deportation despite all of them being unauthorized. When we assess how the enactment of punitive measures against unauthorized immigrants, such as E-Verify mandates, has impacted their migration experience, we find no evidence of a statistically significant association between these measures and the difficulties reported by unauthorized immigrants in accessing a variety of services. However, the enactment of these mandates infuses deportation fear and reduces inter-state mobility among voluntary returnees during their last migration spell, and helps curb deportees’ intent to return to the United States in the near future.

Because of the many advantages of homeownership for immigrants and for the communities where immigrants reside, a variety of countries have implemented policies that facilitate immigrant homeownership. Although these policies hinge on immigration status, the link between immigration status and homeownership is yet to be carefully explored. Using a recent survey of immigrants in Spain, we find that permanent residents from the EU15 enjoy the highest homeownership rates, even after accounting for a wide range of individual and family characteristics known to impact housing ownership. Permanent residents from countries outside the EU15, temporary residents and undocumented immigrants are, respectively, 12 percentagepoints, 29 percentage-points and 33 percentagepoints less likely to own a home than permanent residents from the EU15. Overall, the findings highlight the differences in homeownership by immigrant status, possibly reflecting differences in cultural adaptation and integration across immigrants in host country.

This paper uses data from the 2010 American Community Survey (ACS) to study the returns to language skills of child and adult migrants in the US labor market. We employ an instrumental variable strategy, which exploits differences in language acquisition profiles between immigrants from English- and non-English-speaking countries of origin, to address problems related to endogeneity and measurement error. We find significantly positive returns to language skills and demonstrate that education is an important channel through which language skills affect wages of child migrants. Although the returns of adult migrants do not depend on education, we find that child and adult migrants exhibit similar returns to language skills.

Using survey information about characteristics of personal contacts linked with administrative register information on employment status one year later, I show that unemployed survey respondents with many employed acquaintances have a higher job finding rate. Settlement in a socially deprived neighborhood may, therefore, hamper individual labor market outcomes because of lack of employed contacts. I investigate this hypothesis by exploiting a unique natural experiment that occurred between 1986 and 1998 when refugee immigrants to Denmark were assigned to municipalities quasirandomly, which successfully addresses the methodological problem of endogenous neighborhood selection. Taking account of location sorting, living in a socially deprived neighborhood does not affect labor market outcomes of refugee men. Furthermore, their labor market outcomes are not affected by the overall employment rate of men living in the neighborhood, but positively affected by the employment rate of non-Western immigrant men and co-national men living in the neighborhood. This is strong evidence that immigrants find jobs in part through their employed immigrant and co-ethnic contacts in the neighborhood of residence and that a high quality of contacts increases the individual’s employment chances and annual earnings.

Labor markets are increasingly global. Overseas work can enrich households but also split them geographically, with ambiguous net effects on decisions about work, investment, and education. These net effects, and their mechanisms, are poorly understood. We study a policy discontinuity in the Philippines that resulted in quasi-random assignment of temporary, partial-household migration to high-wage jobs in Korea. This allows unusually reliable measurement of the reduced-form effect of these overseas jobs on migrant households. A purpose-built survey allows nonexperimental tests of different theoretical mechanisms for the reduced-form effect. We also explore how reliably the reduced-form effect could be measured with standard observational estimators. We find large effects on spending, borrowing, and human capital investment, but no effects on saving or entrepreneurship. Remittances appear to overwhelm household splitting as a causal mechanism.

Different disciplines within the social sciences have produced large theoretical and empirical literatures to explain the determinants of anti-immigration attitudes. We bring together these literatures in a unified framework and identify testable hypothesis on what characteristics of the individual and of the local environment are likely to have an impact on anti-immigration attitudes. While most of the previous literature focuses on the explanation of attitudes at the individual level, we focus on the impact on regional characteristics (the local context). Our aim is to explain why people living in different regions differ in terms of their attitudes towards immigration. We isolate the impact of regions from regressions using individual-level data and explain this residual regional heterogeneity in attitudes with aggregate level indicators of regional characteristics. We find that regions with a higher percentage of immigrants born outside the EU and a higher unemployment rate among the immigrant population show a higher probability that natives express negative attitudes to immigration. Regions with a higher unemployment rate among natives however, show less pronounced anti-immigrant attitudes.

The 2004 accession of Eastern European countries (EU8) to the European Union has generated concerns about the influx of low-skill immigrants to the Western member states (EU15). Only three countries, namely Ireland, Sweden, and the UK, did not impose restrictions to immigration from Eastern Europe. Did the elimination of barrier to immigration have an impact on the quality of immigrants arriving to the UK? Using EU15 immigrants as a control group, we find systematic differences between EU8 immigrants arrived before and after the enlargement. The elimination of barriers to immigration seems to have changed the quantity and quality of EU8 immigrants to the UK.

In recent years, the US has become increasingly reliant on foreign registered nurses to satisfy health care demands. The Philippines has emerged as the single largest source of nurses educated abroad, representing more than half of foreign nurses entering the US in the last decade. One of the main concerns raised by the importation of nurses is the quality of care that they provide. This paper addresses this question by analyzing the relative quality of foreign educated nurses and its evolution over time using Census data from 1980 to 2010 and wages as a measure of skill. We find a positive wage premium for nurses educated in the Philippines, but not for foreign nurses educated elsewhere. This premium cannot be explained by differences in demographics, education, work experience, location, or detailed job characteristics. The assimilation profile of Filipino nurses and the types of hospitals that hire them strongly suggest that the premium reflects quality differences and not just unobserved characteristics of the job that carry a higher wage but are unrelated to skill. We provide evidence that the wage premium is likely to be driven by strong positive selection into nursing among Filipinos resulting from the high and heterogeneous returns to the occupation generated by active government support for the migration of nurses in the Philippines.

The flight and expulsion of Germans from Eastern Europe during and after World War II constitutes one of the largest forced population movements in history. We analyze the economic integration of these forced migrants and their offspring in West Germany. The empirical results suggest that even a quarter of a century after displacement, first generation migrants and native West Germans that were comparable before the war perform strikingly different. Migrants have substantially lower incomes and are less likely to own a house or to be self-employed. Displaced agricultural workers, however, have significantly higher incomes. This income gain can be explained by faster transitions out of low-paid agricultural work. Differences in the labor market performance of second generation migrants resemble those of the first generation. We also find that displacement considerably weakens the intergenerational transmission of human capital between fathers and children, especially at the lower tail of the skill distribution.

This paper analyses the effect of emigration from Poland around the time of EU accession on the Polish labour market. We develop a simple model that guides our empirical specification and provides a clear interpretation for our estimates. Focussing on the 1998–2007 period for Poland, we use a unique data set that contains information about household members who are currently living abroad, which allows us to develop region-specific emigration rates and estimate emigration’s effect on wages using within-region variation. Our results show that emigration from Poland was largest for workers with intermediate-level skills and that it is wages for this skill group that increased most. We also show that emigration led to a slight increase in wages overall but that workers at the low end of the skill distribution made no gains and may actually have experienced slight wage decreases.

Over 200 million people worldwide live outside their country of birth and typically experience large gains in material well-being by moving to where incomes are higher. But effects of migration on subjective well-being are less clear, with some studies suggesting that migrants are miserable in their new locations. Observational studies are potentially biased by the self-selection of migrants so a natural experiment is used to compare successful and unsuccessful applicants to a migration lottery in order to experimentally estimate the impact of migration on objective and subjective well-being. The results show that international migration brings large improvements in objective well-being, in terms of incomes and expenditures. Impacts on subjective well-being are complex, with mental health improving but happiness declining, self-rated welfare rising if viewed retrospectively but static if viewed experimentally, self-rated social respect rising retrospectively but falling experimentally and subjective income adequacy rising. We further show that these changes would not be predicted from cross-sectional regressions on the correlates of subjective well-being in either Tonga or New Zealand. More broadly, our results highlight the difficulties of measuring changes in subjective well-being when reference frames change, as likely occurs with migration.

Using administrative panel data on the entire population of new labour immigrants to The Netherlands, we estimate the causal effects of individual labour market spells on immigration durations using the “timing-of-events” method. The model allows for correlated unobserved heterogeneity across migration, unemployment and employment processes. We find that unemployment spells increase return probabilities for all immigrant groups, while re-employment spells typically delay returns. The precise quantitative impacts on migration durations depend on both the timing and lengths of the employment and unemployment spells, and are evaluated in several factual and counterfactual examples.

We use a gravity model of migration and alternative estimation strategies to analyse how income differentials affect the flow of immigrants into U.S. states using annual data from the American Community Survey. We add to existing literature by decomposing income differentials into short- and long-term components and by focusing on newly arrived less-educated immigrants between 2000-2009. Our sample is unique in that the vast majority of our observations take zero values. Models that include observations with zero flow values find that recent male immigrants respond to differences in (short-term) GDP fluctuations between origin countries and U.S. states, and perhaps to (long-term) trend GDP differences as well. More specifically, GDP fluctuations pull less-educated male immigrants into certain U.S. states, whereas GDP trends push less-educated male immigrants out of their countries of origin. Effects for less-educated women are less robust, as GDP coefficients tend to be much smaller than for men.

A model is set up where migrants must choose a level of social traits and consumption of ethnic goods. As the consumption level of ethnic goods increases, the migrants become ever more different to the local population and are less assimilated. Less assimilation affects the reaction of the local population to the migrants and their willingness to accept the newcomers. This social phenomenon and affects wages and unemployment. We show that the growth in the unemployment and social benefits of legal migrants increases the consumption of ethnic goods, thus creating a trap wherein the willingness of the local population to accept the migrants into the economy decreases. This process also increases the probability of the migrants' dependence on the welfare state. On the other hand, illegal migrants could play an important role in the assimilation of the legal migrants.

Migration has a strong economic impact on the sending and host countries. Since individuals and groups do not benefit equally from migration, interest groups emerge to protect and take care of their narrow self-interests and compete for rents generated by migration. Narrow self-interests may be present not only for interest groups but also for ruling politicians and civil servants. In this paper we consider how political culture is important for determining policy and how interest groups affect, via a lobbying process, the choice of public policy. We also consider how interest groups and lobbying activities affect assimilation and attitudes towards migrants and international trade. The narrow interests of the different groups may cause a decrease in social welfare, in some cases, and may enhance welfare in other situations.

Using comprehensive data for German establishments (1999-2008), we estimate plant-level production functions to analyze if “cultural diversity” affects total factor productivity. We distinguish diversity in the establishment’s workforce and in the aggregate regional labor force where the plant is located. We find that a larger share of foreign workers –either in the establishment or in the region –does not affect productivity. However, there are strong spillovers associated with the degree of cultural heterogeneity. The aggregate level is, quantitatively, at least as important as the workforce composition inside the establishment. Diversity thus seems to induce externalities beyond the boundaries of a single firm; it improves local business environments.

This paper provides a comprehensive description of the nature and extent of ethnic segregation in Germany. Using matched employer-employee data for the universe of German workers over the period 1975 to 2008, I show that there is substantial ethnic segregation across both workplaces and residential locations and that the extent of segregation has been relatively stable over the last 30 years. Workplace segregation is particularly pronounced in agriculture and mining, construction, and the service sector, and among low-educated workers. Ethnic minority workers are segregated not only from native workers but also from workers of other ethnic groups, but less so if they share a common language. From a dynamic perspective, for given cohorts of workers, the results show a clear pattern of assimilation, reminiscent of typical earnings assimilation profiles, with immigrants being increasingly less likely to work in segregated workplaces with time spent in the host country.

A rise in population caused by increased immigration, is sometimes accompanied by concerns that the increase in population puts additional or differential pressure on welfare services which might affect the net fiscal contribution of immigrants. The UK and Germany have experienced significant increases in immigration in recent years and this study uses longitudinal data from both countries to examine whether immigrants differ in their use of health services than native born individuals on arrival and over time. While immigrants to Germany, but not the UK, are more likely to self-report poor health than the native-born population, the samples of immigrants use hospital and GP services at broadly the same rate as the native born populations in both countries. Controls for observed and unobserved differences between immigrants and native-born sample populations make little difference to these broad findings.

During the last few decades cultural changes have been taking place in many countries due to migration. The degree to which the foreign culture influences the local culture, differs across countries. This paper shows how the willingness of locals and immigrants to intermarry influences the culture and the national identity of the host country. We use a search-theoretic approach to show that, even in situations where migrants and natives prefer to marry within their own community, the search process may lead to intermarriage. The exogamy can take on two forms: either migrants and natives each hold on to their own culture or the immigrants take on the natives' culture. In the first case we will see new cultures developing and the local culture will not survive over time. In the second case the local culture will survive. We show the conditions for assimilation versus no assimilation between the groups.

Studies in the US have shown that black immigrants have remained at the bottom of the wage ladder and that other groups of immigrants have overtaken them over time. The goal of this research is to determine whether a specific group of immigrants can displace a group at the bottom of the ladder. We use Israeli data to compare two ethnic groups: Israeli Arabs and Ethiopian immigrants. Israeli Arabs were considered to be the least successful ethnic group in the Israeli labor market until they were displaced by the Ethiopian immigrants. The results of our analysis show that an ethnic group at the bottom of the wage ladder can be replaced by another.

This paper evaluates the welfare impact of observed levels of migration and remittances in both origins and destinations, using a quantitative multi- sector model of the global economy calibrated to aggregate and firm-level data on 60 developed and developing countries. Our framework accounts jointly for origin and destination characteristics, as well as the inherently multi-country nature of both migration and other forms of integration, such as international trade and remittance flows. In the presence of firm heterogeneity and imperfect competition larger countries enjoy a greater number of varieties and thus higher welfare, all else equal. Because of this effect, natives in countries that received a lot of migration – such as Canada or Australia – are better off. The remaining natives in countries with large emigration flows – such as Jamaica or El Salvador – are also better off due to migration, but for a different reason: remittances. The quantitative results show that the welfare impact of observed levels of migration is substantial, at about 5 to 10% for the main receiving countries and about 10% for the main sending countries.

Is there a way of eliminating human smuggling? We set up a model to simultaneously determine the provision of human smuggling services and the demand from would-be migrants. A visa-selling policy may be successful at eliminating human smugglers by eroding their profits but it necessarily increases immigration. In contrast, re-enforced repression decreases migration but uses the help of cartelized smugglers. To overcome this trade-off we study how legalisation and repression can be combined to eliminate human smuggling while controlling migration flows. This policy mix also has the advantage that the funds raised by visa sales can be used to finance additional investments in border and internal controls (employer sanctions and deportations). Simulations of the policy implications highlight the complementarities between repression and legalisation and call into question the current policies.

Remittances are a major source of external finance for many developing countries but the cost of sending remittances remains high for many migration corridors. International efforts to lower costs by facilitating the entry of new financial products and new cost comparison information sources rely heavily on the financial literacy of migrants. This paper presents the results of a randomized experiment designed to measure the impact of providing financial literacy training to migrants. Training appears to increase financial knowledge and information seeking behavior and reduces the risk of switching to costlier remittance products but does not change either the frequency or level of remittances.