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Labour Market Status and Migration Dynamics

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Author Info
Bijwaard, G.E. (Erasmus Econometric Institute)

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Abstract

In this empirical paper we assess how labour market transitions and out- and repeat migration of immigrants are interrelated. We estimate a multi-state multiple spell competing risks model with four states: employed, unemployed receiving benefits, out-of-the-labour market (no benefits) and abroad. We discuss one-step ahead transitions from all four states and the transition probability, including all intermediate transitions, from employment. Based on the estimated parameters we simulate the labour-migration dynamics for a synthetic cohort to derive relevant economic indicators, e.g. the probability of experiencing an unemployment spell. For the analysis we use data on recent labour immigrants to The Netherlands, which implies that all migrants are (self)-employed at the time of arrival. We find that many migrants leave the country after a period of no-income. Employment characteristics and the country of origin play an important role in explaining the dynamics. The microsimulations of synthetic cohorts reveal that many migrants experience unemployment spells, but ten years after arrival only a few are unemployed. They also indicate that the Credit Crunch will not only increase the unemployment among migrants but also departure from the country. An increase in the number of migrants from the EU accession countries will lead to more dynamics. We do not expect that the recent simplification of the entry of high income migrants will have a lasting effect, as many of those migrants leave fast.

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Paper provided by Erasmus University Rotterdam, Econometric Institute in its series Econometric Institute Report with number EI 2009-25 Revision_Date: 2009-11-06.

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Date of creation: 19 Oct 2009
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Handle: RePEc:dgr:eureir:1765017016

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Related research
Keywords: migration dynamics; labour market transitions; competing risks; immigrant assimilation;

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  1. 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, ILR School, Cornell University, vol. 50(2), pages 289-303, January.
  2. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October. [Downloadable!] (restricted)
  3. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence," CReAM Discussion Paper Series 0702, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London. [Downloadable!]
  4. Tomi Kyyrä, 2009. "Marginal Effects for Competing Risks Models with Piecewise Constant Hazards," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(4), pages 539-565, 08. [Downloadable!] (restricted)
  5. Borjas, George J & Bratsberg, Bernt, 1996. "Who Leaves? The Outmigration of the Foreign-Born," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 165-76, February. [Downloadable!] (restricted)
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  6. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  7. Jörgen Hansen & Magnus Lofstrom, 1999. "Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate Into or Out-of Welfare," IZA Discussion Papers 100, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Thomas, Jonathan M, 1996. "On the Interpretation of Covariate Estimates in Independent Competing-Risks Models," Bulletin of Economic Research, Blackwell Publishing, vol. 48(1), pages 27-39, January.
  9. Amelie Constant & Douglas S. Massey, 2003. "Self-selection, earnings, and out-migration: A longitudinal study of immigrants to Germany," Journal of Population Economics, Springer, vol. 16(4), pages 631-653, November. [Downloadable!] (restricted)
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  10. Constant, Amelie & Zimmermann, Klaus F., 2003. "Circular Movements and Time Away from the Host Country," IZA Discussion Papers 960, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. Kirdar, Murat G., 2008. "Estimating the impact of immigrants on the host country social security system when return migration is an endogenous choice," MPRA Paper 7803, University Library of Munich, Germany. [Downloadable!]
  12. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier. [Downloadable!] (restricted)
  13. Bailey, Adrian J, 1993. "Migration History, Migration Behavior and Selectivity," The Annals of Regional Science, Springer, vol. 27(4), pages 315-26, December.
  14. Jorgen Hansen & Magnus Lofstrom, 2009. "The dynamics of immigrant welfare and labor market behavior," Journal of Population Economics, Springer, vol. 22(4), pages 941-970, October. [Downloadable!] (restricted)
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  15. Aslan Zorlu & Joop Hartog, 2001. "Migration and Immigrants: The Case of the Netherlands," Tinbergen Institute Discussion Papers 01-042/3, Tinbergen Institute. [Downloadable!]
  16. DaVanzo, Julie, 1983. "Repeat Migration in the United States: Who Moves Back and Who Moves On?," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 552-59, November. [Downloadable!] (restricted)
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