Job Displacement and Migrant Labor Market Assimilation

Maria Balgova () and Hannah Illing ()
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Maria Balgova: Bank of England
Hannah Illing: University of Bonn

No 16349, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: job displacement; immigration; job search (search for similar items in EconPapers)
JEL-codes: J62 J63 J64 (search for similar items in EconPapers)
Pages: 70 pages
Date: 2023-07
New Economics Papers: this item is included in nep-eur, nep-lab, nep-ltv and nep-ure
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