IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp16349.html
   My bibliography  Save this paper

Job Displacement and Migrant Labor Market Assimilation

Author

Listed:
  • Balgova, Maria

    (Bank of England)

  • Illing, Hannah

    (University of Bonn)

Abstract

This paper sheds new light on the barriers to migrants' labor market assimilation. Using administrative data for Germany from 1997-2016, we estimate dynamic difference-in-differences regressions to investigate the relative trajectory of earnings, wages, and employment following mass layoff separately for migrants and natives. We show that job displacement affects the two groups differently even when we systematically control for pre-layoff differences in their characteristics: migrants have on average higher earnings losses, and they find it much more difficult to find employment. However, those who do find a new job experience faster wage growth compared to displaced natives. We examine several potential mechanisms and find that these gaps are driven by labor market conditions, such as local migrant networks and labor market tightness, rather than migrants' behavior.

Suggested Citation

  • Balgova, Maria & Illing, Hannah, 2023. "Job Displacement and Migrant Labor Market Assimilation," IZA Discussion Papers 16349, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16349
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp16349.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    2. Blien, Uwe & Dauth, Wolfgang & Roth, Duncan H.W., 2021. "Occupational routine intensity and the costs of job loss: evidence from mass layoffs," Labour Economics, Elsevier, vol. 68(C).
    3. George J. Borjas, 2021. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 2, pages 3-29, World Scientific Publishing Co. Pte. Ltd..
    4. George J. Borjas, 2021. "Does Immigration Grease the Wheels of the Labor Market?," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 14, pages 431-484, World Scientific Publishing Co. Pte. Ltd..
    5. Hannah Illing & Johannes Schmieder & Simon Trenkle, 2024. "The Gender Gap in Earnings Losses After Job Displacement," Journal of the European Economic Association, European Economic Association, vol. 22(5), pages 2108-2147.
    6. Inés Hardoy & Pål Schøne, 2014. "Does the impact of plant closure on labour market attachment differ between immigrants and native workers across the business cycle?," Empirical Economics, Springer, vol. 46(1), pages 229-252, February.
    7. 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.
    8. Tanja Hethey-Maier & Johannes F. Schmieder, 2013. "Does the Use of Worker Flows Improve the Analysis of Establishment Turnover? Evidence from German Administrative Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 133(4), pages 477-510.
    9. Darren Lubotsky, 2007. "Chutes or Ladders? A Longitudinal Analysis of Immigrant Earnings," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 820-867, October.
    10. Christian Dustmann & Tommaso Frattini & Gianandrea Lanzara, 2012. "Educational achievement of second-generation immigrants: an international comparison [The economic situation of first and second-generation immigrants in France, Germany and the United Kingdom]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 27(69), pages 143-185.
    11. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    12. Bertheau, Antoine & Acabbi, Edoardo & Barcelo, Cristina & Gulyas, Andreas & Lombardi, Stefano & Saggio, Raffaele, 2022. "The Unequal Cost of Job Loss across Countries," IZA Discussion Papers 15033, Institute of Labor Economics (IZA).
    13. Michele Battisti & Gabriel Felbermayr & Giovanni Peri & Panu Poutvaara, 2018. "Immigration, Search and Redistribution: A Quantitative Assessment of Native Welfare," Journal of the European Economic Association, European Economic Association, vol. 16(4), pages 1137-1188.
    14. Brian C. Cadena & Brian K. Kovak, 2016. "Immigrants Equilibrate Local Labor Markets: Evidence from the Great Recession," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 257-290, January.
    15. Yann Algan & Christian Dustmann & Albrecht Glitz & Alan Manning, 2010. "The Economic Situation of First and Second-Generation Immigrants in France, Germany and the United Kingdom," Economic Journal, Royal Economic Society, vol. 120(542), pages 4-30, February.
    16. Perihan Ozge Saygin & Andrea Weber & Michèle A. Weynandt, 2021. "Coworkers, Networks, and Job-Search Outcomes among Displaced Workers," ILR Review, Cornell University, ILR School, vol. 74(1), pages 95-130, January.
    17. Glitz, Albrecht, 2017. "Coworker networks in the labour market," Labour Economics, Elsevier, vol. 44(C), pages 218-230.
    18. Åslund, Olof & Bratu, Cristina & Lombardi, Stefano & Thoresson, Anna, 2021. "Firm productivity and immigrant-native earnings disparity," Working Paper Series 2021:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    19. Francine D Blau & Lawrence M Kahn & Kerry L Papps, 2011. "Gender, Source Country Characteristics, and Labor Market Assimilation among Immigrants," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 43-58, February.
    20. repec:oup:ecpoli:v:27:y:2012:i:69:p:143-185 is not listed on IDEAS
    21. 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..
    22. Johannes F. Schmieder & Till von Wachter & Jörg Heining, 2023. "The Costs of Job Displacement over the Business Cycle and Its Sources: Evidence from Germany," American Economic Review, American Economic Association, vol. 113(5), pages 1208-1254, May.
    23. George J. Borjas, 2021. "The Slowdown in the Economic Assimilation of Immigrants: Aging and Cohort Effects Revisited Again," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 3, pages 31-65, World Scientific Publishing Co. Pte. Ltd..
    24. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 439-479.
    25. Ran Abramitzky & Leah Platt Boustan & Katherine Eriksson, 2014. "A Nation of Immigrants: Assimilation and Economic Outcomes in the Age of Mass Migration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 467-506.
    26. Meekes, Jordy & Hassink, Wolter H.J., 2022. "Gender differences in job flexibility: Commutes and working hours after job loss," Journal of Urban Economics, Elsevier, vol. 129(C).
    27. Matthias Schündeln, 2014. "Are Immigrants More Mobile Than Natives? Evidence From Germany," Journal of Regional Science, Wiley Blackwell, vol. 54(1), pages 70-95, January.
    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. Maria Balgova & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," ECONtribute Discussion Papers Series 246, University of Bonn and University of Cologne, Germany.
    2. Mária Balgová & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," CRC TR 224 Discussion Paper Series crctr224_2023_457, University of Bonn and University of Mannheim, Germany.
    3. Illing, Hannah & Koch, Theresa, 2021. "Who Suffers the Greatest Loss? Costs of Job Displacement for Migrants and Natives," IAB-Discussion Paper 202108, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Sébastien Willis, 2022. "Workplace Segregation and the Labour Market Performance of Immigrants," CESifo Working Paper Series 9895, CESifo.
    5. Arellano-Bover, Jaime & San, Shmuel, 2023. "The Role of Firms and Job Mobility in the Assimilation of Immigrants: Former Soviet Union Jews in Israel 1990–2019," IZA Discussion Papers 16389, Institute of Labor Economics (IZA).
    6. Engdahl, Mattias & Willis, Sébastien & Åslund, Olof, 2024. "Professional networks and the labour market assimilation of immigrants," Working Paper Series 2024:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Bernt Bratsberg & Giovanni Facchini & Tommaso Frattini & Anna Cecilia Rosso, 2023. "Are political and economic integration intertwined?," Economica, London School of Economics and Political Science, vol. 90(360), pages 1265-1306, October.
    8. 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.
    9. Escamilla-Guerrero, David & Kosack, Edward & Ward, Zachary, 2021. "Life after crossing the border: Assimilation during the first Mexican mass migration," Explorations in Economic History, Elsevier, vol. 82(C).
    10. Roupakias, Stelios, 2023. "Immigrant Assimilation in the Greek Labor Market," MPRA Paper 118351, University Library of Munich, Germany.
    11. tavassoli, nahid & noghani, farzaneh & noghanibehambari, hamid, 2022. "Gender Gap in Education as a Portable Cultural Element: Evidence from First and Second Generation Immigrants," MPRA Paper 113514, University Library of Munich, Germany.
    12. Ansala, Laura & Åslund, Olof & Sarvim¨aki, Matti, 2018. "Immigration history, entry jobs, and the labor market integration of immigrants," Working Paper Series 2018:20, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    13. Peri Giovanni & Rutledge Zachariah, 2022. "Economic Assimilation of Mexicans and Central Americans in the United States," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 13(1), pages 1-26, January.
    14. Zimran, Ariell, 2022. "US immigrants’ secondary migration and geographic assimilation during the Age of Mass Migration," Explorations in Economic History, Elsevier, vol. 85(C).
    15. NoghaniBehambari, Hamid & Tavassoli, Nahid & noghani, farzaneh, 2020. "Intergenerational Transmission of Culture among Immigrants: Gender Gap in Education among First and Second Generations," MPRA Paper 105265, University Library of Munich, Germany.
    16. Morgan Raux, 2021. "Cultural differences and immigrants' wages," DEM Discussion Paper Series 21-02, Department of Economics at the University of Luxembourg.
    17. Dustmann, Christian & Görlach, Joseph-Simon, 2016. "Estimating immigrant earnings profiles when migrations are temporary," Labour Economics, Elsevier, vol. 41(C), pages 1-8.
    18. Arellano-Bover, Jaime & Saltiel, Fernando, 2021. "Differences in On-the-Job Learning across Firms," IZA Discussion Papers 14473, Institute of Labor Economics (IZA).
    19. Sweetman, A. & van Ours, J.C., 2014. "Immigration : What About the Children and Grandchildren?," Discussion Paper 2014-009, Tilburg University, Center for Economic Research.
    20. Brian Duncan & Stephen J. Trejo, 2015. "Assessing the Socioeconomic Mobility and Integration of U.S. Immigrants and Their Descendants," The ANNALS of the American Academy of Political and Social Science, , vol. 657(1), pages 108-135, January.

    More about this item

    Keywords

    immigration; job displacement; job search;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    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:iza:izadps:dp16349. 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: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.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.