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Immigration and the Tower of Babel: Using language barriers to identify individual labor market effects of immigration

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  • Hoen, Maria Forthun

Abstract

This paper introduces a novel approach to estimating immigration impacts on natives’ labor market outcomes. Differential language requirements across occupations serve as an arguably exogenous source of variation during the large and sudden immigration surge to Norway after the enlargements of the European labor market in 2004 and 2007. Migrant inflow into occupations is instrumented with occupations’ required level of (Norwegian) language skills. Administrative register data allow for a rich set of individual-level outcomes. Comparing workers in occupations with different language requirements, I find that a one percentage point increase in the share of Eastern European workers reduced native workers’ labor earnings by 0.75 percent. I further find adverse employment effects and evidence of skill-upgrading, but largely no other form of worker mobility among treated individuals. In particular, young woŕkers were hit in the wage dimension and old workers in the employment dimension. The results are highly robust.

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  • Hoen, Maria Forthun, 2020. "Immigration and the Tower of Babel: Using language barriers to identify individual labor market effects of immigration," Labour Economics, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:labeco:v:65:y:2020:i:c:s0927537120300397
    DOI: 10.1016/j.labeco.2020.101834
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    Cited by:

    1. Bernt Bratsberg & Andreas Moxnes & Oddbjørn Raaum & Karen Helene Ulltveit‐Moe, 2023. "Opening The Floodgates: Partial And General Equilibrium Adjustments To Labor Immigration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 3-21, February.
    2. Maria F. Hoen & Simen Markussen & Knut Røed, 2022. "Immigration and economic mobility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(4), pages 1589-1630, October.
    3. Aepli, Manuel & Kuhn, Andreas, 2021. "Open labor markets and Firms’ substitution between training apprentices and hiring workers," Labour Economics, Elsevier, vol. 70(C).
    4. Hoen, Maria F. & Markussen, Simen & Røed, Knut, 2018. "Immigration and Social Mobility," IZA Discussion Papers 11904, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Immigration; Earnings; Employment; Language requirements;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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