Labour-market assimilation of foreign workers in Italy (original) (raw)
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Wage assimilation: migrants versus natives and foreign migrants versus internal migrants
Rscas Working Papers, 2013
The paper wants to understand the assimilation pattern of foreign migrants in Italy. Three novelties characterize this study. First, the research compares the wage assimilation of international migrants with both internal migrants and local natives in Italy, a country with substantial internal and international migration. This comparison, never exploited before, provides indirect evidence for the role played by language and knowledge of social capital in the assimilation of foreign migrants relative to both natives and internal migrants. Second, we inquired into the possible causes of underassimilation by controlling for the date of entry and migrant sector concentration. Third, we model new corrections of the selection bias due to return migration. The correction for the selection bias is introduced in the wage equation through a duration extension of the traditional Heckman correction term and alternatively through a hazard rate correction. The empirical test uses the Italian administrative dataset on dependent employment (WHIP), to estimate a fixed effect model for the weekly wages of males aged 18-45 with controls for selection in return migration and unobserved heterogeneity. The three groups of workers start their careers at the same wage level. But, as experience increases, the wage profiles of foreign nationals and natives, both internal migrants and locals, diverges which seems to hint at the importance of language and social capital. However, sectorby-sector analysis shows that in "migrant intense sectors" internal migrants and locals have the same wage profile as foreign workers. Positive selection in returns reinforces the view that the best leave because they have few career options. Thus under assimilation is caused more by community and job segregation than by a lack of language and social capital: alternatively it is the result of their interrelations.
Wage assimilation: migrants versus natives
2013
BACKGROUND Italy is a country of recent foreign immigration with a long history of internal migration. Concerns about economic integration addressed in the past flows of southern natives to the north and now the international migrants, who are crucial in an ageing society. OBJECTIVE This paper studies the assimilation pattern of foreign migrants in Italy by comparing wage profiles for foreign nationals with both locals and internal migrants. Possible causes of under-assimilation are analysed by controlling for macro economic conditions at entrance into the labour market and for labour market segmentation. METHODS WHIP data are used to estimate a fixed effect model for the weekly wages of males aged 18-45. Controls for selection for return migration are introduced through a duration extension of the traditional Heckman correction term and alternatively through a hazard rate correction. RESULTS The three groups of workers start their careers at the same wage level. But, as experience increases, the wage profiles of foreigners and the two groups of natives diverge. The analysis shows that the concentration of foreign nationals in "migrant intense sectors" is the primary reason for lack of assimilation. We also find positive selection in returns for foreign workers: the more skilled are more likely to leave Italy because of the lack of opportunities in terms of career upgrading. CONCLUSIONS Under assimilation of foreign workers in the Italian labour market is essentially caused more by job segregation than by a lack of language knowledge and social capital endowment or by the macro economic conditions faced at entrance into the labour market.
Foreign migrants versus internal migrants: the assimilation pattern
The novelties of the paper are two. First the paper compares the pattern of wage assimilation of foreigners with both native immigrants and local natives in Italy, a country with large internal and international migration. This comparison demonstrates the role played by language and knowledge of social capital in the assimilation of immigrants relative to both natives and internal immigrants. Second we model new corrections of the selection bias due to return migration. In the wage equation we correct for selection bias through a duration extension of the traditional Heckman correction term and alternatively we use a hazard rate correction. The empirical test use the Italian administrative dataset on dependent employment (WHIP), to estimate a fixed effect model of the weekly wages of males aged 18-45 with controls for selection in return migration and unobserved heterogeneity. The three groups of workers start their careers at the same wage level but, as experience increases, the wage profiles of foreigners and natives, both immigrants and locals, diverge. A positive selection in the returns prevails, with both corrections, so that the foreign workers with lower wages are the most likely to stay in Italy. Also an " ethnic " skill differential emerges. JEL code: J31, J61, C23 Acknowledgments: We thank David Card, Martin Ruhs, Herbert Brucker, Dan-Olof Rooth, Tommaso Frattini, Emilio Reyneri, John Dagsvik and participants to the ESPE, EALE, IMISCOE and TOM conferences and two anonymous referees for helpful comments.
Working Papers Labour Market Effects of Immigration: an Empirical Analysis Based on Italian Data
Gavosto, Venturini, Villosio (1999) found that the impact of immigrants on the wage rates of natives was positive. This result has led to the present paper which analyses the effect of immigrants on native employment. Two aspects of being unemployed are considered: i) displacement risk, the probability of moving from employment into unemployment; and ii) job-search effectiveness, the probability of moving from unemployment into employment within one year. The quarterly Labour Force Survey data (ISTAT) from 1993 to 1997 are used. The transition probabilities depend on two sets of independent variables at time t: the individual’s characteristics and the external conditions of the market. A probit model is applied for repeated-cross-sections on “specific” local areas in order to check for possible autocorrelation and endogeneity. The results show that in the North of Italy, where most immigrants are located, the share of immigrants has either no effect or has a complementary effect on the probability of finding a job in the case of workers looking for a new job; while in the case of people looking for a first job (young people) the effect was negative in 1993; while it was positive in the last years. A complementary effect prevails in the case of native transition from employment to unemployment. There is a negative effect only in the manufacturing sector in Northern Italy for 1996, and this is probably due to other factors, such as the increased use of temporary contracts in that area during that year.
Economic Modelling, 2011
This paper examines the impact of the immigration of foreigners on domestic labor mobility. Since David Card's seminal study on the regional labor market impact of the Mariel Boatlift it is controversial whether domestic labor mobility equilibrates economic conditions across regions. However, there is little or no evidence that natives leave destinations where migrants tend to cluster. In this paper we reconcile the existing evidence by taking another route: we analyze whether the immigration of foreigners replaces domestic mobility from poor to rich regions. We focus on Italy, which is characterized by large North-South wage and unemployment differentials, and apply panel cointegration methods. The main finding is that, conditional on unemployment and wage differentials, the presence of foreign workers in the labor force of the destination regions discourages internal labor mobility significantly. As a consequence, spatial correlation studies which use the variance of the foreigner share across regions for identifying the wage and employment effects of immigration, tend to understate the actual impact of foreign immigration.
The Role of Immigrants in the Italian Labour Market
In little more than a decade, Italy has become a country characterized by immigration from abroad. This pattern is far removed from what central-northern European countries experienced during the 1950s and the1960s. Immigration has not been explicitly demanded by employers, nor has been ruled by agreements with the immigrants. countries of origin, nor perceived as necessary for the economic system. For all these reasons, immigration has been chaotic and managed in an emergency and approximate way, even though it is deemed useful and is requested by the .informal. as well as the .official. economy. Following presentations of statistics on trends in the phenomenon, three issues are analysed: - how immigrants are integrated into a labour market that has not called them and into circumstances characterized by the absence of public policies to help them in their job search. - whether it is possible to separate regular immigration involved in the .official. market from irregular immigration in the hidden economy, considering advantages of the first and harmful effects of the second for the Italian socio-economic system. - whether it is appropriate to address complementarity between immigrant labour and the national labour force in a country with 2,500,000 unemployed workers and heavy territorial unbalances.