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Immigrant-Native Differences in Earnings Mobility Processes

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Author Info

  • Nisar Ahmad

    ()
    (Department of Border Region Studies, University of Southern Denmark)

  • Rayhaneh Esmaeilzadeh

    (Ministry of Community and Social Services, Canada)

  • J?rgen Hansen

    (Department of Economics, Concordia University, Canada)

Registered author(s):

    Abstract

    This study compares the earnings mobility between immigrants and natives within and between Denmark and Canada. Both countries have different labour market conditions and immigration history which leads to an interesting comparison of earning mobility processes. The paper employs a dynamic multinomial logit model with discrete factor approximation for the specification of unobserved individual heterogeneity. The model takes into account the effect of the endogenous initial conditions problem and unobserved heterogeneity to separate structural and spurious state dependence. The results show that immigrants-native differences in earnings mobility, structural state dependence, and segmentation of earnings distribution are relatively more prominent in Denmark compared to Canada.

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    File URL: http://www.bapress.ca/ref/v4-1/1923-7529-2014-04-13-20.pdf
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    Bibliographic Info

    Article provided by Better Advances Press, Canada in its journal Review of Economics & Finance.

    Volume (Year): 4 (2014)
    Issue (Month): (Feburary)
    Pages: 13-32

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    Handle: RePEc:bap:journl:140102

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    Related research

    Keywords: Discrete Factor Approximation; Earnings Mobility Process; Immigrants and Natives; Quartile Mobility Rates; Spurious and Structural State Dependence;

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    References

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    1. Blume, Kr├Žn & Verner, Mette, 2006. "Welfare Dependency among Danish Immigrants," Working Papers 06-6, University of Aarhus, Aarhus School of Business, Department of Economics.
    2. Prowse, Victoria, 2005. "State Dependence in a Multi-State Model of Employment Dynamics," IZA Discussion Papers 1623, Institute for the Study of Labor (IZA).
    3. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    4. Thomas Liebig, 2007. "The Labour Market Integration of Immigrants in Denmark," OECD Social, Employment and Migration Working Papers 50, OECD Publishing.
    5. Charles M. Beach & Ross Finnie, 2001. "Cyclical Changes in Short-Run Earnings Mobility in Canada, 1982-1996," The State of Economics in Canada: Festschrift in Honour of David Slater, in: Patrick Grady & Andrew Sharpe (ed.), The State of Economics in Canada: Festschrift in Honour of David Slater, pages 453-484 Centre for the Study of Living Standards.
    6. Jeffrey M Wooldridge, 2002. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," CeMMAP working papers CWP18/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    7. Mark B. Stewart, 2007. "The interrelated dynamics of unemployment and low-wage employment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 511-531.
    8. Mroz, Thomas A., 1999. "Discrete factor approximations in simultaneous equation models: Estimating the impact of a dummy endogenous variable on a continuous outcome," Journal of Econometrics, Elsevier, vol. 92(2), pages 233-274, October.
    9. Pedersen, Peder J. & Smith, Nina, 2002. "Unemployment Traps: Do Financial Dis-incentives matter?," CLS Working Papers 01-1, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
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