IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

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

  • 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)

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.

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

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

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. Husted, Leif & Nielsen, Helena Skyt & Rosholm, Michael & Smith, Nina, 2000. "Employment and Wage Assimilation of Male First Generation Immigrants in Denmark," IZA Discussion Papers 101, Institute for the Study of Labor (IZA).
  2. Manacorda, Marco & Manning, Alan & Wadsworth, Jonathan, 2006. "The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain," IZA Discussion Papers 2352, Institute for the Study of Labor (IZA).
  3. Per Krusell & Lee E. Ohanian & Jose-Victor Rios-Rull & Giovanni L. Violante, 1997. "Capital-skill complementarity and inequality: a macroeconomic analysis," Staff Report 239, Federal Reserve Bank of Minneapolis.
  4. Yashiv, Eran, 2006. "U.S. Labor Market Dynamics Revisited," IZA Discussion Papers 2455, Institute for the Study of Labor (IZA).
  5. Stephen Wheatley Price, . "The Employment Adjustment of Male Immigrants in England," Discussion Papers in Public Sector Economics 98/9, Department of Economics, University of Leicester.
  6. 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 1199-99, University of Wisconsin Institute for Research on Poverty.
  7. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
  8. Per-Anders Edin & Robert J. LaLonde & Olof Aslund, 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Working Papers 0020, Harris School of Public Policy Studies, University of Chicago.
  9. Eran Yashiv, 2007. "U.S. Labor Market Dynamics Revisited," CEP Discussion Papers dp0831, Centre for Economic Performance, LSE.
  10. M. Ruth & K. Donaghy & P. Kirshen, 2006. "Introduction," Chapters, in: Regional Climate Change and Variability, chapter 1 Edward Elgar.
  11. Mario Forni & Marc Hallin & Marco Lippi & Lucrezia Reichlin, 2000. "The Generalized Dynamic-Factor Model: Identification And Estimation," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 540-554, November.
  12. Bernt Bratsberg & Erling Barth & Oddbjørn Raaum, 2006. "Local Unemployment and the Relative Wages of Immigrants: Evidence from the Current Population Surveys," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 243-263, May.
  13. 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, vol. 4(3), pages 376-414, July.
  14. Frijters, Paul & Shields, Michael A. & Wheatley Price, Stephen, 2003. "Immigrant Job Search in the UK: Evidence from Panel Data," IZA Discussion Papers 902, Institute for the Study of Labor (IZA).
  15. 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, vol. 50(2), pages 289-303, January.
  16. Robert E. Hall, 2005. "Employment Fluctuations with Equilibrium Wage Stickiness," American Economic Review, American Economic Association, vol. 95(1), pages 50-65, March.
  17. Barth, Erling & Bratsberg, Bernt & Raaum, Oddbjørn, 2003. "Local Unemployment and the Earnings Assimilation of Immigrants in Norway," Memorandum 19/2002, Oslo University, Department of Economics.
  18. David Card, 2009. "Immigration and Inequality," American Economic Review, American Economic Association, vol. 99(2), pages 1-21, May.
  19. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  20. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-90, September.
  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, vol. 18(2), pages 221-51, April.
  22. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-94, October.
  23. Giovanni Peri & Gianmarco I.P. Ottaviano, 2006. "Rethinking the Effects of Immigration on Wages," Working Papers 634, University of California, Davis, Department of Economics.
  24. 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.
  25. Funk, Peter & Vogel, Thorsten, 2004. "Endogenous skill bias," Journal of Economic Dynamics and Control, Elsevier, vol. 28(11), pages 2155-2193, October.
  26. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 369-405, July.
  27. Erling Barth & Bernt Bratsberg & Oddbj¯rn Raaum, 2004. "Identifying Earnings Assimilation of Immigrants under Changing Macroeconomic Conditions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(1), pages 1-22, 03.
  28. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence from the UK," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 236-256, 06.
  29. Karin Mayr & Giovanni Peri, 2008. "Return Migration as a Channel of Brain Gain," NBER Working Papers 14039, National Bureau of Economic Research, Inc.
  30. Bell, Brian D, 1997. "The Performance of Immigrants in the United Kingdom: Evidence from the GHS," Economic Journal, Royal Economic Society, vol. 107(441), pages 333-44, March.
  31. Bender, Stefan & Haas, Anette & Klose, Christoph, 2000. "IAB Employment Subsample 1975-1995 Opportunities for Analysis Provided by the Anonymised Subsample," IZA Discussion Papers 117, Institute for the Study of Labor (IZA).
  32. 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).
  33. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
  34. Chiswick, Barry R, 1980. "The Earnings of White and Coloured Male Immigrants in Britain," Economica, London School of Economics and Political Science, vol. 47(185), pages 81-87, February.
  35. Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, vol. 72(5), pages 968-79, December.
  36. Stephen A. Woodbury, 2009. "Unemployment," Book chapters authored by Upjohn Institute researchers, 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.
  37. Breitung, Jörg & Eickmeier, Sandra, 2005. "Dynamic factor models," Discussion Paper Series 1: Economic Studies 2005,38, Deutsche Bundesbank, Research Centre.
  38. George J. Borjas, 1994. "Assimilation and Changes in Cohort Quality Revisited: What Happened to Immigrant Earnings in the 1980s?," NBER Working Papers 4866, National Bureau of Economic Research, Inc.
  39. 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.
  40. 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.
Full references (including those not matched with items on IDEAS)

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

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.