Asymmetric Information in the Labor Market

Population, Space and Place, 2015

Skilled immigration to the US has been multi‐channelled via legislation on permanent and temporary visa programmes. This paper argues that skilled immigrants were not disadvantaged during the Great Recession because of a new hedging mechanism, which starts with the federal legislation that admits skilled non‐immigrants, proceeds to vest authority in employers who perform rigorous screening and selection of temporary workers for future permanency, and ends with greater protection of those selected. To test this mechanism, this paper examines skilled immigrants' spatial mobility out of the country and their domestic labour market outcomes. The paper presents evidence from analysing repeated, nationally representative survey data of college graduates in the US using demographic techniques of intra‐cohort and inter‐cohort analyses. The major findings about the substantial cross‐border mobility and high levels of labour force participation among at‐entry temporary visa holders who la...

2015

Coming to America: Does Immigrant's Home Country Economic Status Impact the Probability of Self-Employment in the U.S.? * This paper examines the impact of home country economic status on immigrant selfemployment probability in the U.S. We estimate a probability model and find that, consistent across race, immigrants from developed countries are more likely to be self-employed in the U.S than are immigrants from developing countries. This result is unexpected given previous research which suggests that immigrants from countries with high levels of self-employment tend to be more involved in self-employment in the U.S. Developing countries on average have higher self-employment rates than do developed countries but our research shows that immigrants from developing countries have similar or lower self-employment probabilities relative to native born White Americans, whereas immigrant from developed countries have significantly higher self-employment probabilities relative to native born White Americans. We provide two potential explanations for this result. First, immigrants from developed countries may indeed have more and better access to start-up capital from their country of origin. Second, institutional arrangements in the developed world may be similar across countries allowing immigrants from developed countries to have an informational advantage over immigrants from developing countries.

There are concerns about the attachment of immigrants to the labour force, and the potential policy responses. This paper uses a bi-national survey on immigrant performance to investigate the sorting of individuals into full-time paid-employment and entrepreneurship and their economic success. Particular attention is paid to the role of legal status at entry in the host country (worker, refugee, and family reunification), ethnic networks, enclaves and other differences among ethnicities for their integration in the labour market. Since the focus is on the understanding of the self-employment decision, a two-stage structural probit model is employed that determines the willingness to work full-time (against part-time employment and not working), and the choice between full-time paid work and self-employment. The choices are determined by the reservation wage for full-time work, and the perceived earnings from working in paid-employment and as entrepreneur, among other factors. Accounting for sample selectivity, the paper provides regressions explaining reservation wages, and actual earnings for paid-employment and self-employment, which provide the basis for such an analysis. The structural probit models suggest that the expected earnings differentials from working and reservation wages and for self-employment and paid-employment earnings matter much, although only among a number of other determinants. For Germany, legal status at entry is important; former refugees and those migrants who arrive through family reunification are less likely to work fulltime; refugees are also less self-employed. Those who came through the employment channel are more likely to be in full-time paid work. In Denmark, however, the status at entry variables do not play any significant role. This suggests that the Danish immigrant selection system is ineffective.

Industrial and Labor Relations Review, 1991

Characteristics 82 9.4 Earnings Functions for Natives and Transnational Immigrants 85 9.5 Earnings Functions for Other Immigrants 87 9.6 Predicted Wage Differentials Between Immigrants and Natives at Time of Migration 88 Vlll 9.7 Average Rates of Growth in Immigrant and Native Earnings 9.8 Predicted Present Value Differentials Between Immigrants and Natives 7.1 Relative Wage of Immigrant Cohorts in the Host Countries 7.2(a) Relative Wage of African Cohorts in the Host Countries 7.2(b) Relative Wage of European Cohorts in the Host Countries 7.2(c) Relative Wage of Asian Cohorts in the Host Countries 7.2(d) Relative Wage of Latin American Cohorts in the Host Countries IX SOURCES: U.S. Department of Commerce (various issues), U.S. Immigration and Naturaliza tion Service (various issues), Historical Statistics of Canada, Canada Yearbook (various issues), Australian Immigration.

Journal of Population Economics, 2009

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

Review of Economics of the Household, 2010

New Zealand Journal of …, 2007

Research over the past two decades has identified the impact of job irrelevant variables on selection decisions. Many of these variables reflect stereotypes associated with ethnicity, age or other factors. This study uses a short-listing simulation with 183 New Zealand managers to assess the impact of ethnicity, migration status on short-listing in a condition of labour scarcity. The policycapturing approach was complemented by in-depth interviews. The findings include significant schema-driven, selection penalties for minority and migrant applicants that are moderated by worker scarcity. This supports new models of social categorisation that include employer motivation in selection decision-making. At a practical level, it suggests that a 'screen in' approach to short-listing may reduce employment discrimination.

2009

In this paper I provide estimates of the impact of immigration on native wage and employment levels (rather than on wage inequality which has been the focus of the literature). I use variation within 2-digit industries across regions using Aus- trian panel data from 1986 to 2004 for identi…cation. Using an instrumental variable strategy I …nd large displacement eects in the service sector and large native em- ployment increases in manufacturing. This heterogeneous response is explained by large increases in output in manufacturing, due to a high elasticity of product de- mand, as immigration reduces the cost of production, while on average demand is far less elastic in service industries. Estimated substitution eects, for a given level of output, are large in both industries and in line with US estimates. The fraction of immigrants went from 5% to 15% of the labor force over this period; the structural estimates imply this reduced average native wages by around 2.5% and resulted in ...

American Economic Review, 2009

The role that source country characteristics has in determining the labor market performance of immigrants has long been explored by economists. For example, Borjas J. Borjas 1987 models the migration decision as determined by expected difference in the immigrant's position in the earnings distribution in the host and source countries. Deborah A. Cobb-Clark 1993 extends Borjas' model to immigrant women. Similarly, other studies explore how culture or traditional gender roles in the source country persist across borders and

ESA-RN27 Mid-Term Conference 2018 - Abstract in Atti di convegno, 2018

Italy, from main Southern European country of first reception of migratory flows, becomes a country that close its harbours to control the migratory phenomenon following the establishment in 2018 of a right-wing populist government. Therefore, it seems more important to study the impact that waves of migration have entailed and continue to involve within the Italian social structure, as well as on the labor market and on social relations. The aim of this paper is analyze, through the use of second level data, the Italian migratory model and its impact on the labor market, paying specific attention to Molise region. In fact, in accordance with ISTAT data, Molise is the region where the number of resident migrants has grown progressively: from 10,800 in 2015 to 12,982 in 2017. Molise also has the highest number of permanent structures and reception centre for asylum-seekers in relation to citizens. The analysis will be organized in three different steps: 1) statistical overview on the labor force of immigrants in Europe, using processed data by Eurostat, for first description of the phenomenon; 2) comparison Eurostat data with labor force data of immigrants in Italy, processed by Istat and by italian Ministry of Labor and Social Policy; 3) comparison of European and Italian data, processed by Istat, with data on the labor force of immigrants in Molise. The reference to the data on the different labor forces will be useful, primarily, to compare empirically employment and unemployment rates of immigrants on the European territory to italian’s rates. Secondly, it will be possible to show an exhaustive picture of the working and integrative situation of foreigners residing in Italy; then this data will be compared to Molise’s data. Finally, we will try to outline possible practical solutions aimed to encourage greater employment inclusion of immigrants within the host countries, with particular attention to induction of training courses and the implementation of active labor policies.

Economia Politica, 2022

Understanding the type of immigration flow that maximises the expected economic benefits in the destination countries is one of the main debated topics both in the economic literature and in policy agendas worldwide. In recent years, governments have developed regulations of migration flows by adopting some form of selective immigration policy based on either human capital criteria or skill needs. Admission policies in the destination countries are likely to affect the direction and magnitude of selection as well as the socioeconomic performance of immigrants. However, the relationship between quality-selective policy and immigrants' skill composition remains largely unexplored. This paper aims to survey the existing literature on how selective-immigration policies shape the characteristics of immigrants from the receiving-country perspective. First, it introduces the main route of admissions and the theoretical models to understand how the direction of selection works; second, it discusses the theoretical models; third, it reviews the empirical works. A final concluding section briefly points out the actual findings and future avenues of work.

International Journal of Manpower, 1994

Introduction A major aspect of the literature on the labour market experience of the immigrant worker is the assimilation hypothesis which suggests that, over time, immigrant worker earnings will tend to converge with those of equally qualified indigenous workers (see for example Borjas[1]). One assumption is that initially immigrants will be forced to accept undesirable jobs as a means of gaining access to the labour market. However, as they begin to acquire skills appropriate to the host country (including language skills) it is argued that they will be able to move into jobs with more desirable characteristics. When comparing second-generation immigrants with those of the first-generation, the assimilation hypothesis would suggest fewer of the former would be in undesirable jobs. Related to this is whether workers receive compensating pay for undertaking unpleasant tasks, or more specifically, do those immigrant workers who have the worst jobs get paid more, ceteris paribus. The empirical literature on compensating differentials reveals in general that the expected positive relation between poor working conditions and pay does not emerge in cross-section analysis[2]. This may arise because of omitted variables (e.g. initiative and reliability) which are negatively correlated with measured disamenities. An alternative explanation is the so-called Hamermesh effect[3]. Workers who are low paid (given their human capital) may exaggerate the extent to which their current jobs involve disamenities. This problem is likely to exist whether or not there is supporting evidence from employers, but with employers' data it is possible to correct for this source of measurement error. The effect may be particularly strong in the case of immigrants who feel excluded from the host society. In this article we make use of a unique data set which possesses information on two distinct immigrant communities including The authors are grateful to R. Elliott, D. Mackay and I. Theodossiou for comments.

1998

The skill levels of immigrants entering the USA has declined in recent decades; however, most immigrants to the USA continue to be admitted on the basis of family contacts, without reference to labour-market characteristics. This situation has given rise to a debate about the criteria on which immigrants are admitted or excluded. I examine how the relative skill levels of immigrants admitted under different criteria vary by country of origin, those criteria being the possession of highly-valued skills and family connections. Using data from the Immigration and Naturalization Service, Borjas' 1987 model is tested. The results show (a) that the relative skill levels of the two groups do indeed differ by country of origin, and (b) the pattern by country of origin is consistent with the Borjas predictions. The policy implication is that the effects of changing admission criteria will differ by country of origin, but in a predictable way.

Journal of Ethnic and Migration Studies, 2013

Journal of Risk and Financial Management

Movements of labor across the world is an ongoing debate in the literature in terms of its drivers and results in sending and receiving areas. Skill composition of immigrant labor has been discussed by several papers, although they generally focused on visa policies or firm level productivity. However, this paper focuses on the relationship between immigrants’ educational attainment and government budgeting on research and development (R&D). Panel data analysis is applied for European countries, along with instrumental variable approach as a robustness check. Findings reveal that higher budget allocation for R&D is associated with higher skill level of immigrants within overall immigrant population. This finding is driven by young immigrants whose ages are between 25 and 34 and female immigrants in these countries, suggesting that this relationship varies among sub-groups of immigrants, which would have significant policy implications. Hence, the novel and original approach of the p...