This Paper studies the dynamic impact of mass migration from the Former Soviet Union to Israel on natives’ labour market outcomes. Specifically, we attempt to distinguish between the short-run and long-run effects of immigrants on natives’ wages and employment. The transition of immigrants into a new labour market is a gradual process: the dynamics of this process come from immigrants’ occupational mobility and from adjustments by local factors of production. Natives may therefore face changing labour market conditions, even years after the arrival of the immigrants. If immigrants are relatively good substitutes for native workers, we expect that the impact of immigration will be largest immediately upon the immigrants’ arrival, and may become smaller as the labor market adjusts to the supply shock. Conversely, if immigrants upon arrival are poor substitutes for natives because of their lack of local human capital, the initial effect of immigration is small, and the effect increases as immigrants acquire local labour market skills and compete with native workers. We empirically examine these alternative hypotheses using data from Israel’s Labor Force and Income Surveys from 1989 to 1999. We find that wages of both men and women are negatively correlated with the fraction of immigrants with little local experience in a given labour market segment. A 10% increase in the share of immigrants lowers natives’ wages in the short run by 1 to 3%, but this effect dissolves after 4 to 7 years. This result is robust to a variety of different segmentations of the labour market, to the inclusion of cohort effects, and to different dynamic structures in the residual term of the wage equation. On the other hand, we do not find any effect of immigration on employment, neither in the short nor in the long run.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
4640.
Find related papers by JEL classification: F22 - International Economics - - International Factor Movements and International Business - - - International Migration J00 - Labor and Demographic Economics - - General - - - General J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)