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The Labor Market Costs of Job Displacement by Migrant Status

Author

Listed:
  • Balgova, Maria

    (Bank of England)

  • Illing, Hannah

    (University of Bonn)

Abstract

This paper examines the differential impact of job displacement on migrants and natives. Using administrative data for Germany from 1997-2016, we identify mass layoffs and estimate the trajectory of earnings and employment of observationally similar migrants and natives displaced from the same establishment. Despite similar pre-layoff careers, migrants lose an additional 9% of their earnings in the first 5 years after displacement. This gap arises from both lower re-employment probabilities and post-layoff wages and is not driven by selective return migration. Key mechanisms include sorting into lower-quality firms and depending on lower-quality coworker networks during job search.

Suggested Citation

  • Balgova, Maria & Illing, Hannah, 2024. "The Labor Market Costs of Job Displacement by Migrant Status," IZA Discussion Papers 17496, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17496
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    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

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