What else? Immigrant–native cohorts entering the labour market under a context of adverse shocks: the great recession and COVID-19

Marta Escalonilla, Begoña Cueto and Maria Jose Perez-Villadoniga

Applied Economic Analysis, 2024, vol. 32, issue 96, 207-231

Abstract: Purpose - This paper aims to analyse the short- and long-term effects of entering the Spanish labour market under tough economic conditions on young immigrant–native earnings and employment outcomes. Design/methodology/approach - The authors use cohorts, where the entry cohort into the labour market is the unit of observation. As a database, the authors use the continuous sample of working histories covering the period 2007–2021. Then, the authors estimate the model using weighted least squares. Findings - The results show that the great recession and COVID-19 led to a blockage at the entrance of the labour market, reducing the number of workers. Additionally, the authors observe an adverse impact in terms of employment and earnings on those entering the labour market. Besides, this effect varies in intensity and persistence for natives and immigrants, as well as by country of birth, age of entry, gender and educational level. Originality/value - A contribution to the literature is the analysis of the earnings and employment trajectories of young people entering the Spanish labour market for the first time during an adverse shock, such as the 2008 economic crisis or the COVID-19 crisis, and the possible differences that exist between native and immigrant workers. So, the authors analyse the labour market trajectories of workers covering the most recent years. Likewise, the authors carry out an extensive heterogeneity analysis in which they distinguish workers by educational level, gender, age of entry into the labour market and immigrants by their country of birth. This represents an additional contribution. The use of a cohort approach also contributes to the existing literature.

Keywords: Recession; Immigrants; Natives; Earnings; Employment; Young workers; J1; J31; J61 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:aeapps:aea-07-2023-0275

DOI: 10.1108/AEA-07-2023-0275

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