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Local Unemployment and the Earnings Assimilation of Immigrants in Norway

Author

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  • Barth, Erling

    () (Institute for Social Research)

  • Bratsberg, Bernt

    () (Ragnar Frisch Centre for Economic Research)

  • Raaum, Oddbjørn

    () (Ragnar Frisch Centre for Economic Research)

Abstract

Labour market outcomes of immigrants and natives are affected differently by macroeconomic conditions. In particular, we show that earnings of immigrants in Norway from outside the OECD area are more sensitive to local labour market conditions than are earnings of natives. Failure to account for such differences may bias estimates when periods of rising or declining unemployment are important to identify assimilation effects on immigrant earnings. We show that this is the case for Norway: An observed drop in relative earnings of non-OECD immigrants after about 10 years in the host country disappears when we account for differential business cycle effects on immigrant and native earnings. The empirical evidence also reveals that local labour market conditions impact the rate of the earnings assimilation. We interpret the effect of unemployment on the assimilation rate in terms of a combined "wage curve effect” and a “learning effect” on the rate at which immigrants acquire country-specific human capital.

Suggested Citation

  • 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.
  • Handle: RePEc:hhs:osloec:2002_019
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    File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2002/Memo-19-2002.pdf
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    2. Efendic, Nedim & Andersson, Fredrik W. & Wennberg, Karl, 2015. "Growth in first- and second-generation immigrant firms in Sweden," Ratio Working Papers 265, The Ratio Institute.
    3. 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.
    4. Dustmann, Christian & Glitz, Albrecht & Vogel, Thorsten, 2010. "Employment, wages, and the economic cycle: Differences between immigrants and natives," European Economic Review, Elsevier, vol. 54(1), pages 1-17, January.
    5. Taryn Ann Galloway & Rolf Aaberge, 2005. "Assimilation effects on poverty among immigrants in Norway," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(4), pages 691-718, November.
    6. repec:taf:edecon:v:25:y:2017:i:1:p:84-111 is not listed on IDEAS
    7. Amuedo Dorantes, Catalina & De la Rica Goiricelaya, Sara, 2006. "Labor Market Assimilation of Recent Immigrants in Spain," DFAEII Working Papers 2006-01, University of the Basque Country - Department of Foundations of Economic Analysis II.
    8. Akay, Alpaslan & Tezic, Kerem, 2007. "Local Unemployment and the Earnings-Assimilation of Immigrant Men in Sweden: Evidence from Longitudinal Data, 1990-2000," Working Papers in Economics 277, University of Gothenburg, Department of Economics, revised 21 Jan 2007.
    9. Akay, Alpaslan & Karabulut, Gokhan & Tezic, Kerem, 2006. "Economic Performance of Turkish Immigrant Men in the European Labour-Market: Evidence from Sweden," Working Papers in Economics 240, University of Gothenburg, Department of Economics.
    10. Esteve Sanromá & Raúl Ramos & Hipólito Simón, 2015. "Portability of Human Capital and Immigrant Overeducation in Spain," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 34(2), pages 223-241, April.
    11. Gabin Langevin & David Masclet & Fabien Moizeau & Emmanuel Peterle, 2017. "Ethnic gaps in educational attainment and labor-market outcomes: evidence from France," Education Economics, Taylor & Francis Journals, vol. 25(1), pages 84-111, January.
    12. Xiangbo Liu & Theodore Palivos & Xiaomeng Zhang, 2017. "Immigration, Skill Heterogeneity, And Qualification Mismatch," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1231-1264, July.
    13. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    14. Hans Bonesrønning & Torberg Falch & Bjarne Strøm, 2003. "Teacher Sorting, Teacher Quality, and Student Composition: Evidence from Norway," Working Paper Series 3403, Department of Economics, Norwegian University of Science and Technology.
    15. Akay, Alpaslan, 2007. "Dynamics of Employment- and Earnings-Assimilation of First-Generation Immigrant Men in Sweden, 1990-2000," Working Papers in Economics 279, University of Gothenburg, Department of Economics.

    More about this item

    Keywords

    immigrants; unemployment; Labour market; assimilation;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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