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Do when and where matter? initial labour market conditions and immigrant earnings

  • Olof �slund
  • Dan-Olof Rooth

This article investigates the long-term effects on immigrant earnings and employment of labour market conditions encountered upon arrival. We find that early earnings assimilation depends crucially on a favourable national labour market. Exposure to high local unemployment rates also affects individuals for at least ten years. To handle the issue of selective migration, we compare refugees entering Sweden during a severe and unexpected recession to refugees arriving during a preceding economic boom. The analysis of effects at the local level exploits a governmental refugee settlement policy to get exogenous variation in local labour market conditions. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 117 (2007)
Issue (Month): 518 (03)
Pages: 422-448

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Handle: RePEc:ecj:econjl:v:117:y:2007:i:518:p:422-448
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  1. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Settlement Policies and the Economic Success of Immigrants," Working Paper Series 2000:22, Uppsala University, Department of Economics.
  2. Hansen, Jörgen & Löfström, Magnus, 2001. "The Dynamics of Immigrant Welfare and Labour Market Behaviour," CEPR Discussion Papers 3028, C.E.P.R. Discussion Papers.
  3. Rosholm, M. & Scott, K. & Husted, L., 2000. "The Times they Are A-Changin' . Organizational Change and Immigrnat Employment Opportunities in Scandinavia," Papers 00-07, Centre for Labour Market and Social Research, Danmark-.
  4. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages F626-53, November.
  5. McDonald, James Ted & Worswick, Christopher, 1999. "The Earnings of Immigrant Men in Australia: Assimilation, Cohort Effects, and Macroeconomic Conditions," The Economic Record, The Economic Society of Australia, vol. 75(228), pages 49-62, March.
  6. David T. Ellwood, 1982. "Teenage Unemployment: Permanent Scars or Temporary Blemishes?," NBER Chapters, in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 349-390 National Bureau of Economic Research, Inc.
  7. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working Papers 780, Princeton University, Department of Economics, Industrial Relations Section..
  8. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
  9. Edin, P.-A. & Fredriksson, P. & Aslund, O., 2000. "Evidence from a Natural Experiment," Papers 2000:21, Uppsala - Working Paper Series.
  10. Arulampalam, Wiji, 2001. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," Economic Journal, Royal Economic Society, vol. 111(475), pages F585-606, November.
  11. Edin, P.-A. & Lalonde, R.J. & Aslund, O., 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Papers 2000:13, Uppsala - Working Paper Series.
  12. Edin, P.-A. & Fredriksson, P., 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Papers 2000-19, Uppsala - Working Paper Series.
  13. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
  14. 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, vol. 51(3), pages 465-482, April.
  15. Madeline Zavodny, 1998. "Determinants of recent immigrants' locational choices," Working Paper 98-3, Federal Reserve Bank of Atlanta.
  16. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-88, August.
  17. Steiner, Viktor, 2001. " Unemployment Persistence in the West German Labour Market: Negative Duration Dependence or Sorting?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(1), pages 91-113, February.
  18. Bartel, Ann P, 1989. "Where Do the New U.S. Immigrants Live?," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 371-91, October.
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