IDEAS home Printed from https://ideas.repec.org/p/irs/cepswp/2024-09.html
   My bibliography  Save this paper

Natives Sorting and the Impact of Immigration on European Labor Markets

Author

Listed:
  • Michal Burzynski
  • Giovanni Peri

Abstract

We analyze the implications of non-EU immigration for wage distribution and inequality among European workers, by focusing on their migration across local labor markets and within- and across-occupational mobility. To quantify the role of each channel, we build a multi-region, multi-occupation and multi-sector model of labor markets that replicates the regularities of labor mobility across spatial and occupational cells in Europe observed in the data. We find that non-EU immigration increases wages of the majority of European workers, while generating significant sorting across occupations (job upgrading) and inducing negative self-selection of natives into inactivity. The overall level of income inequality rises (especially the between-occupation component), fueled by natives’ mobility across jobs. The sorting of native workers across regions induced by immigration is of lesser importance for welfare and inequality, but shapes the spatial distribution of overall effects.

Suggested Citation

  • Michal Burzynski & Giovanni Peri, 2024. "Natives Sorting and the Impact of Immigration on European Labor Markets," LISER Working Paper Series 2024-09, Luxembourg Institute of Socio-Economic Research (LISER).
    • Handle: RePEc:irs:cepswp:2024-09
    as

    Download full text from publisher

    File URL: https://liser.elsevierpure.com/fr/publications/natives-sorting-and-the-impact-of-immigration-on-european-labor-m
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Amior, 2020. "The contribution of immigration to local labor market adjustment," CEP Discussion Papers dp1678, Centre for Economic Performance, LSE.
    2. Joan Llull, 2018. "Immigration, Wages, and Education: A Labour Market Equilibrium Structural Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(3), pages 1852-1896.
    3. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
    4. John DiNardo & David Card, 2000. "Do Immigrant Inflows Lead to Native Outflows?," American Economic Review, American Economic Association, vol. 90(2), pages 360-367, May.
    5. Mette Foged & Giovanni Peri, 2016. "Immigrants' Effect on Native Workers: New Analysis on Longitudinal Data," American Economic Journal: Applied Economics, American Economic Association, vol. 8(2), pages 1-34, April.
    6. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    7. Simonovska, Ina & Waugh, Michael E., 2014. "The elasticity of trade: Estimates and evidence," Journal of International Economics, Elsevier, vol. 92(1), pages 34-50.
    8. Joan Monras, 2020. "Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis," Journal of Political Economy, University of Chicago Press, vol. 128(8), pages 3017-3089.
    9. Arnaud Costinot & Jonathan Vogel, 2015. "Beyond Ricardo: Assignment Models in International Trade," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 31-62, August.
    10. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 3, pages 81-115 World Scientific Publishing Co. Pte. Ltd..
    11. Cristina Cattaneo & Carlo V. Fiorio & Giovanni Peri, 2015. "What Happens to the Careers of European Workers When Immigrants “Take Their Jobs†?," Journal of Human Resources, University of Wisconsin Press, vol. 50(3), pages 655-693.
    12. Lorenzo Caliendo & Luca David Opromolla & Fernando Parro & Alessandro Sforza, 2021. "Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement," Journal of Political Economy, University of Chicago Press, vol. 129(12), pages 3491-3545.
    13. Christoph Albert, 2021. "The Labor Market Impact of Immigration: Job Creation versus Job Competition," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 35-78, January.
    14. Joan Monras, 2021. "Local Adjustment to Immigrant-Driven Labor Supply Shocks," Journal of Human Capital, University of Chicago Press, vol. 15(1), pages 204-235.
    15. Christian Dustmann & Uta Schönberg & Jan Stuhler, 2017. "Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(1), pages 435-483.
    16. David Card, 2009. "Immigration and Inequality," American Economic Review, American Economic Association, vol. 99(2), pages 1-21, May.
    17. Michael A. Clemens & Jennifer Hunt, 2019. "The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results," ILR Review, Cornell University, ILR School, vol. 72(4), pages 818-857, August.
    18. Giovanni Peri & Vasil Yasenov, 2019. "The Labor Market Effects of a Refugee Wave: Synthetic Control Method Meets the Mariel Boatlift," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 267-309.
    19. David H. Autor & Michael J. Handel, 2013. "Putting Tasks to the Test: Human Capital, Job Tasks, and Wages," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages 59-96.
    20. Heckman, James J & Honore, Bo E, 1990. "The Empirical Content of the Roy Model," Econometrica, Econometric Society, vol. 58(5), pages 1121-1149, September.
    21. Ulltveit-Moe, Karen Helene & Moxnes, Andreas & Bratsberg, Bernt & Raaum, Oddbjørn, 2019. "Opening the Floodgates: Industry and Occupation Adjustments to Labor Immigration," CEPR Discussion Papers 13670, C.E.P.R. Discussion Papers.
    22. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 2021. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 8, pages 163-234, World Scientific Publishing Co. Pte. Ltd..
    23. George J. Borjas & Joan Monras, 2017. "The labour market consequences of refugee supply shocks," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(91), pages 361-413.
    24. Julian Giovanni & Andrei A. Levchenko & Francesc Ortega, 2015. "A Global View Of Cross-Border Migration," Journal of the European Economic Association, European Economic Association, vol. 13(1), pages 168-202, February.
    25. George J. Borjas, 2021. "Native Internal Migration and the Labor Market Impact of Immigration," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 10, pages 275-312, World Scientific Publishing Co. Pte. Ltd..
    26. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2012. "The Impact Of Immigration On The Structure Of Wages: Theory And Evidence From Britain," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 120-151, February.
    27. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(1), pages 145-173.
    28. Arnaud Costinot & Jonathan Vogel, 2010. "Matching and Inequality in the World Economy," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 747-786, August.
    29. Giovanni Peri, 2016. "The Effect Of Immigration On Productivity: Evidence From U.S. States," World Scientific Book Chapters, in: The Economics of International Migration, chapter 8, pages 265-275, World Scientific Publishing Co. Pte. Ltd..
    30. Jingting Fan, 2019. "Internal Geography, Labor Mobility, and the Distributional Impacts of Trade," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(3), pages 252-288, July.
    31. Francesco D'Amuri & Giovanni Peri, 2016. "Immigration, Jobs, And Employment Protection: Evidence From Europe Before And During The Great Recession," World Scientific Book Chapters, in: The Economics of International Migration, chapter 5, pages 153-185, World Scientific Publishing Co. Pte. Ltd..
    32. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
    33. Frédéric Docquier & Çağlar Ozden & Giovanni Peri, 2016. "The Labour Market Effects Of Immigration And Emigration In Oecd Countries," World Scientific Book Chapters, in: The Economics of International Migration, chapter 6, pages 187-226, World Scientific Publishing Co. Pte. Ltd..
    34. Robert S. Chirinko & Debdulal Mallick, 2017. "The Substitution Elasticity, Factor Shares, and the Low-Frequency Panel Model," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 225-253, October.
    35. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    36. Amior, Michael, 2020. "Immigration, local crowd-out and undercoverage bias," LSE Research Online Documents on Economics 108490, London School of Economics and Political Science, LSE Library.
    37. Peri, Giovanni & Sparber, Chad, 2011. "Assessing inherent model bias: An application to native displacement in response to immigration," Journal of Urban Economics, Elsevier, vol. 69(1), pages 82-91, January.
    38. Butcher, Kristin F & Card, David, 1991. "Immigration and Wages: Evidence from the 1980's," American Economic Review, American Economic Association, vol. 81(2), pages 292-296, May.
    39. Hanson, Gordon & Liu, Chen, 2023. "Immigration and occupational comparative advantage," Journal of International Economics, Elsevier, vol. 145(C).
    40. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters, in: The Economics of International Migration, chapter 3, pages 81-115, World Scientific Publishing Co. Pte. Ltd..
    41. Reinaldo B. Arellano-Valle & Adelchi Azzalini, 2022. "Some properties of the unified skew-normal distribution," Statistical Papers, Springer, vol. 63(2), pages 461-487, April.
    42. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    43. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    44. Daniel Chiquiar & Gordon H. Hanson, 2005. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 239-281, April.
    45. George J. Borjas, 2021. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 9, pages 235-274, World Scientific Publishing Co. Pte. Ltd..
    46. Christoph Albert & Joan Monras, 2022. "Immigration and Spatial Equilibrium: The Role of Expenditures in the Country of Origin," American Economic Review, American Economic Association, vol. 112(11), pages 3763-3802, November.
    47. Chang‐Tai Hsieh & Erik Hurst & Charles I. Jones & Peter J. Klenow, 2019. "The Allocation of Talent and U.S. Economic Growth," Econometrica, Econometric Society, vol. 87(5), pages 1439-1474, September.
    48. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    49. Kristin Butcher & David Card, 1991. "Immigration and Wages: Evidence From the 1980's," Working Papers 661, Princeton University, Department of Economics, Industrial Relations Section..
    50. Adelchi Azzalini & Antonella Bacchieri, 2010. "A prospective combination of phase II and phase III in drug development," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 347-369.
    51. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
    52. Gharad Bryan & Melanie Morten, 2019. "The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2229-2268.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Edo, Anthony & Rapoport, Hillel, 2019. "Minimum wages and the labor market effects of immigration," Labour Economics, Elsevier, vol. 61(C).
    2. Lewis, Ethan & Peri, Giovanni, 2015. "Immigration and the Economy of Cities and Regions," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 625-685, Elsevier.
    3. Committee, Nobel Prize, 2021. "Answering causal questions using observational data," Nobel Prize in Economics documents 2021-2, Nobel Prize Committee.
    4. Sara de la Rica & Albretch Glitz & Francesc Ortega, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," Working Papers 2013-16, FEDEA.
    5. Lebow, Jeremy, 2024. "Immigration and occupational downgrading in Colombia," Journal of Development Economics, Elsevier, vol. 166(C).
    6. Aksu, Ege & Erzan, Refik & Kırdar, Murat Güray, 2022. "The impact of mass migration of Syrians on the Turkish labor market," Labour Economics, Elsevier, vol. 76(C).
    7. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    8. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    9. Edo, Anthony & Özgüzel, Cem, 2023. "The impact of immigration on the employment dynamics of European regions," Labour Economics, Elsevier, vol. 85(C).
    10. Michal Burzynski, 2024. "Spatial and Occupational Mobility of Workers Due to Automation," LISER Working Paper Series 2024-04, Luxembourg Institute of Socio-Economic Research (LISER).
    11. Chletsos Michael & Roupakias Stelios, 2019. "Do Immigrants Compete with Natives in the Greek Labour Market? Evidence from the Skill-Cell Approach before and during the Great Recession," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-30, April.
    12. Ottaviano, Gianmarco I.P. & Peri, Giovanni & Wright, Greg C., 2018. "Immigration, trade and productivity in services: Evidence from U.K. firms," Journal of International Economics, Elsevier, vol. 112(C), pages 88-108.
    13. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr, 2018. "The Effects of Immigration in Developed Countries: Insights from Recent Economic Research," CEPII Policy Brief 2018-22, CEPII research center.
    14. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    15. Ortega, Javier & Verdugo, Gregory, 2014. "The impact of immigration on the French labor market: Why so different?," Labour Economics, Elsevier, vol. 29(C), pages 14-27.
    16. Sanchis-Guarner, Rosa, 2023. "Decomposing the impact of immigration on house prices," Regional Science and Urban Economics, Elsevier, vol. 100(C).
    17. Borjas, George J. & Edo, Anthony, 2021. "Gender, Selection into Employment, and the Wage Impact of Immigration," IZA Discussion Papers 14261, Institute of Labor Economics (IZA).
    18. Stefano Fusaro & Enrique López‐Bazo, 2021. "Immigration and Native Employment. Evidence from Italian Provinces in the Aftermath of the Great Recession," Papers in Regional Science, Wiley Blackwell, vol. 100(2), pages 405-428, April.
    19. Mette Foged & Linea Hasager & Vasil Yasenov, 2022. "The role of labor market institutions in the impact of immigration on wages and employment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(1), pages 164-213, January.
    20. Giovanni Peri, 2016. "Immigrants, Productivity, and Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 3-30, Fall.

    More about this item

    Keywords

    Immigration; Welfare; Sorting; Self-selection;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • 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
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:irs:cepswp:2024-09. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Library and Documentation (email available below). General contact details of provider: https://edirc.repec.org/data/cepsslu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.