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Local Unemployment and the Earnings Assimilation of Immigrants in Norway

  • Barth, Erling

    ()

    (Institute for Social Research)

  • Bratsberg, Bernt

    ()

    (Ragnar Frisch Centre for Economic Research)

  • Raaum, Oddbjørn

    ()

    (Ragnar Frisch Centre for Economic Research)

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.

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File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2002/Memo-19-2002.pdf
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Paper provided by Oslo University, Department of Economics in its series Memorandum with number 19/2002.

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Length: 48 pages
Date of creation: 17 Jun 2003
Date of revision:
Handle: RePEc:hhs:osloec:2002_019
Contact details of provider: Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
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  1. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
  2. John E. Hayfron, 1998. "The performance of immigrants in the Norwegian labor market," Journal of Population Economics, Springer, vol. 11(2), pages 293-303.
  3. Husted, Leif & Skyt Nielsen, Helena & Rosholm, Michael & Smith, Nina, 2000. "Employment and Wage Assimilation of Male First Generation Immigrants in Denmark," CLS Working Papers 00-1, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
  4. Roed,K. & Zhang,T., 2000. "Labour market transitions and economic incentives," Memorandum 15/2000, Oslo University, Department of Economics.
  5. Eli Berman & Kevin Lang & Erez Siniver, 1999. "Language Skill Complementarity: Returns to Immigrant Language Acquisition," Boston University - Institute for Economic Development 96, Boston University, Institute for Economic Development.
  6. Robert J. LaLonde & Robert H. Topel, 1990. "The Assimilation of Immigrants in the U.S. Labor Markets," NBER Working Papers 3573, National Bureau of Economic Research, Inc.
  7. Helena Skyt Nielsen & Michael Rosholm & Nina Smith & Leif Husted, 2004. "Qualifications, discrimination, or assimilation? An extended framework for analysing immigrant wage gaps," Empirical Economics, Springer, vol. 29(4), pages 855-883, December.
  8. Karsten Albaek & Rita Asplund & Erling Barth & Stig Blomskog & Bjorn Runar Gudmundsson & Vifill Karlsson & Erik Strojer Madsen, 2000. "Dimensions of the Wage-Unemployment Relationship in the Nordic Countries: Wage Flexibility Without Wage Curves," Econometric Society World Congress 2000 Contributed Papers 1893, Econometric Society.
  9. Jasso, Guillermina & Rosenzweig, Mark R., 1985. "What's In a Name? Country-of-Origin Influences on the Earnings of Immigrants in the United States," Bulletins 8424, University of Minnesota, Economic Development Center.
  10. John P. Haisken-DeNew & Christoph M. Schmidt, 2000. "Interindustry and Interregion Differentials: Mechanics and Interpretation," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 516-521, August.
  11. Pål Longva & Oddbjørn Raaum, 2003. "Earnings assimilation of immigrants in Norway – A reappraisal," Journal of Population Economics, Springer, vol. 16(1), pages 177-193, 02.
  12. 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.
  13. Cornell, Bradford & Welch, Ivo, 1996. "Culture, Information, and Screening Discrimination," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 542-71, June.
  14. 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.
  15. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, June.
  16. George J. Borjas, 1987. "Self-Selection and the Earnings of Immigrants," NBER Working Papers 2248, National Bureau of Economic Research, Inc.
  17. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April.
  18. James Ted McDonald & Christopher Worswick, 1997. "Unemployment Incidence of Immigrant Men in Canada," Canadian Public Policy, University of Toronto Press, vol. 23(4), pages 353-373, December.
  19. Bernt Bratsberg & James F. Ragan Jr., 2002. "The Impact of Host-Country Schooling on Earnings: A Study of Male Immigrants in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 63-105.
  20. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October.
  21. 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.
  22. Longva, P. & Raaum, O., 1998. "Unemployment and Relative Earnings of Immigrants," Memorandum 02/1998, Oslo University, Department of Economics.
  23. Bernt Bratsberg, 2002. "School Quality and Returns to Education of U.S. Immigrants," Economic Inquiry, Western Economic Association International, vol. 40(2), pages 177-198, April.
  24. Greenwood, Michael J & McDowell, John M, 1991. "Differential Economic Opportunity, Transferability of Skills, and Immigration to the United States and Canada," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 612-23, November.
  25. Barth, Erling & Bratsberg, Bernt & Naylor, Robin A. & Raaum, Oddbjørn, 2002. "Explaining Variations in Wage Curves: Theory and Evidence," Memorandum 03/2002, Oslo University, Department of Economics.
  26. 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.
  27. 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.
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