The Labor Market Costs of Job Displacement by Migrant Status

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

No 17496, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: immigration; job displacement; job search (search for similar items in EconPapers)
JEL-codes: J62 J63 J64 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2024-12
New Economics Papers: this item is included in nep-eur, nep-int, nep-lab, nep-mig and nep-ure
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