Advanced Search
MyIDEAS: Login to save this paper or follow this series

Employment, Wages, and the Economic Cycle: Differences between Immigrants and Natives

Contents:

Author Info

  • Christian Dustmann

    ()
    (Centre for Research and Analysis of Migration, Department of Economics, University College London)

  • Albrecht Glitz

    ()
    (Centre for Research and Analysis of Migration, Department of Economics, University College London)

  • Thorsten Vogel

    ()
    (Humboldt Universitat zu Berlin and Centre for Research and Analysis of Migration)

Abstract

In this paper, we analyse differences in the cyclical pattern of employment and wages of immigrants and natives for two large immigrant receiving countries, Germany and the UK. We show that, despite large differences in their immigrant populations, there are similar and significant differences in cyclical responses between immigrants and natives in both countries, even conditional on education, age, and location. We decompose changes in outcomes into a secular trend and a business cycle component. We find significantly larger unemployment responses to economic shocks for low-skilled workers relative to high-skilled workers and for immigrants relative to natives within the same skill group. There is little evidence for differential wage responses to economic shocks. We offer three explanations for these findings: an equilibrium search model, where immigrants experience higher job separation rates, a model of dual labour markets, and differences in the complementarity of immigrants and natives to capital.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cream-migration.org/publ_uploads/AbstrDPS_09_06.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 0609.

as in new window
Length:
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:crm:wpaper:0609

Contact details of provider:
Postal: Drayton House, 30 Gordon Street, London WC1H 0AX
Phone: +44 (0)20 7679 5888
Fax: +44 (0)20 7916 2775
Web page: http://www.cream-migration.org/
More information through EDIRC

Related research

Keywords: Immigration; Unemployment; Business Cycle;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Ottaviano, Gianmarco I. P. & Peri, Giovanni, 2007. "Rethinking the effects of immigration on wages," HWWI Research Papers, Hamburg Institute of International Economics (HWWI) 3-8, Hamburg Institute of International Economics (HWWI).
  2. Robert E. Hall, 2005. "Employment Fluctuations with Equilibrium Wage Stickiness," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 50-65, March.
  3. Husted, L. & Nielsen, H.S. & Rosholm, M. & Smith, N., 2000. "Employment and Wage Assimilation of Male First Generation Immigrants in Denmark," Papers, Centre for Labour Market and Social Research, Danmark- 00-01, Centre for Labour Market and Social Research, Danmark-.
  4. Karin Mayr & Giovanni Peri, 2008. "Return Migration as a Channel of Brain Gain," NBER Working Papers 14039, National Bureau of Economic Research, Inc.
  5. Hurst, Michael E. & Chiswick, Barry R., 2000. "The Employment, Unemployment and Unemployment Compensation Benefits of Immigrants," IZA Discussion Papers 129, Institute for the Study of Labor (IZA).
  6. Forni, Mario & Hallin, Marc & Lippi, Marco & Reichlin, Lucrezia, 1999. "The Generalized Dynamic Factor Model: Identification and Estimation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2338, C.E.P.R. Discussion Papers.
  7. Chiswick, Barry R, 1980. "The Earnings of White and Coloured Male Immigrants in Britain," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 47(185), pages 81-87, February.
  8. Barth, Erling & Bratsberg, Bernt & Raaum, Oddbjørn, 2003. "Local Unemployment and the Relative Wages of Immigrants: Evidence from the Current Population Surveys," Memorandum, Oslo University, Department of Economics 20/2002, Oslo University, Department of Economics.
  9. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2006. "The impact of immigration on the structure of male wages: theory and evidence from Britain," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 19797, London School of Economics and Political Science, LSE Library.
  10. Edin, Per-Anders & LaLonde, Robert J. & Åslund, Olof, 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Working Paper Series, Uppsala University, Department of Economics 2000:13, Uppsala University, Department of Economics.
  11. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
  12. Stephen A. Woodbury, 2009. "Unemployment," Book chapters authored by Upjohn Institute researchers, W.E. Upjohn Institute for Employment Research, in: Kenneth G. Dau-Schmidt & Seth D. Harris & Orley Lobel (ed.), Labor and Employment Law and Economics, volume 2, pages 480-516 W.E. Upjohn Institute for Employment Research.
  13. Note: For best results & the figures should be printed on a non-Postscript printer. Hoynes & H., . "The Employment, Earnings, and Income of Less-Skilled Workers over the Business Cycle," Institute for Research on Poverty Discussion Papers, University of Wisconsin Institute for Research on Poverty 1199-99, University of Wisconsin Institute for Research on Poverty.
  14. Funk, Peter & Vogel, Thorsten, 2004. "Endogenous skill bias," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 28(11), pages 2155-2193, October.
  15. Barth, Erling & Bratsberg, Bernt & Raaum, Oddbjørn, 2003. "Local Unemployment and the Earnings Assimilation of Immigrants in Norway," Memorandum, Oslo University, Department of Economics 19/2002, Oslo University, Department of Economics.
  16. Erling Barth & Bernt Bratsberg & Oddbj¯rn Raaum, 2004. "Identifying Earnings Assimilation of Immigrants under Changing Macroeconomic Conditions," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 106(1), pages 1-22, 03.
  17. Stephen Wheatley Price & Paul Frijters & Michael A. Shields, 2004. "Immigrant Job Search in the UK: Evidence from Panel Data," Econometric Society 2004 Australasian Meetings, Econometric Society 197, Econometric Society.
  18. Borjas, George J, 1995. "Assimilation and Changes in Cohort Quality Revisited: What Happened to Immigrant Earnings in the 1980s?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 13(2), pages 201-45, April.
  19. P. Diamond, 1980. "Aggregate Demand Management in Search Equilibrium," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 268, Massachusetts Institute of Technology (MIT), Department of Economics.
  20. Bulow, Jeremy I & Summers, Lawrence H, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy,Discrimination, and Keynesian Unemployment," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 4(3), pages 376-414, July.
  21. Friedberg, Rachel M, 2000. "You Can't Take It with You? Immigrant Assimilation and the Portability of Human Capital," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 18(2), pages 221-51, April.
  22. Stephen Wheatley Price, . "The Employment Adjustment of Male Immigrants in England," Discussion Papers in Public Sector Economics, Department of Economics, University of Leicester 98/9, Department of Economics, University of Leicester.
  23. David Card, 2009. "Immigration and Inequality," CReAM Discussion Paper Series, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London 0907, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  24. Barry R. Chiswick & Yinon Cohen & Tzippi Zach, 1997. "The labor market status of immigrants: Effects of the unemployment rate at arrival and duration of residence," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 50(2), pages 289-303, January.
  25. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence from the UK," British Journal of Industrial Relations, London School of Economics, London School of Economics, vol. 45(2), pages 236-256, 06.
  26. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 12(3), pages 369-405, July.
  27. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, American Economic Association, vol. 75(4), pages 676-90, September.
  28. Bell, Brian D, 1997. "The Performance of Immigrants in the United Kingdom: Evidence from the GHS," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(441), pages 333-44, March.
  29. Per Krusell & Lee E. Ohanian & Jose-Victor Rios-Rull & Giovanni L. Violante, 1997. "Capital-skill complementarity and inequality: a macroeconomic analysis," Staff Report, Federal Reserve Bank of Minneapolis 239, Federal Reserve Bank of Minneapolis.
  30. Jörg Breitung & Sandra Eickmeier, 2006. "Dynamic factor models," AStA Advances in Statistical Analysis, Springer, Springer, vol. 90(1), pages 27-42, March.
  31. Yashiv, Eran, 2006. "U.S. Labor Market Dynamics Revisited," IZA Discussion Papers 2455, Institute for the Study of Labor (IZA).
  32. James Ted McDonald & Christopher Worswick, 1998. "The Earnings of immigrant men in Canada: Job tenure, cohort, and macroeconomic conditions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 51(3), pages 465-482, April.
  33. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 25-49, March.
  34. Eran Yashiv, 2007. "U.S. Labor Market Dynamics Revisited," CEP Discussion Papers, Centre for Economic Performance, LSE dp0831, Centre for Economic Performance, LSE.
  35. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  36. Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, American Economic Association, vol. 72(5), pages 968-79, December.
  37. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:crm:wpaper:0609. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CReAM Administrator) or (Thomas Cornelissen).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.