Wage assimilation: migrants versus natives (original) (raw)
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Labour-market assimilation of foreign workers in Italy
Oxford Review of Economic Policy, 2008
This is the first paper that analyses the labour market assimilation of foreign (i.e. non-citizen) workers in Italy. It considers the daily wages and the days of employment of male workers in WHIP, a matched employer-employee panel dataset, from 1990-2003. The traditional human capital approach is augmented by a control for the probability of staying abroad, modelled by aggregate variables of the origin country. The human capital variables considered are age and experience, both in and out of employment. What emerges from the empirical analysis is discouraging. Foreigners who are able to get higher wages are the least likely to stay, but assimilation profiles do not change when return migration is taken into account. Foreigners employed in the private sector earn the same wages as natives upon entrance into employment, but the two wage profiles diverge with on-the-job experience. Neither do foreigners assimilate from an employment perspective: a differential in employment between foreign and native workers is found even upon entrance, which increases over time.
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.
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Migration flows experienced a steadily increasing trend mainly due to the increase of landings of immigrants who seek shelter in European "lands of opportunities". The huge size of phenomenon has profoundly changed the composition of host society modifying social, demographic and economic balances. Therefore, socio-economic integration of foreign population is the main issue, to harness full integration into the host environment. Economic assimilation of foreigners comes from the absorption of labor market, which is the royal road to social emancipation and integration of immigrants. For these reasons the present study aims to analyze the composition of Italian labor market, which is unique in the European scenario because of the presence of a foreign employment rate higher than the native population one. In order to understand nature and changes of phenomenon, first paragraph makes a brief analysis of contributions in literature in order to understand how the dynamics of ...
Does Immigration Raise Blue and White Collar Wages of Natives? The Case of Italy
LABOUR, 2010
This paper analyses theoretically and empirically the effects of immigration on the wage rate of native workers. Empirical literature rarely finds that immigration generates a fall in the wages of manual workers. The theoretical model presented in this paper justifies those results, by hypothesizing an economic system where advanced firms buy an intermediate good from traditional firms, which employ manual workers in both clean and dirty tasks, the latter being more disliked by native workers. We conclude that native skilled wages always increase whereas native unskilled wages can both increase or decrease with immigration. An empirical analysis of the Italian labour market follows, showing that all native workers' wages rise with immigration JEL Class.: J31; J61; J82.
The Immigrants Wage Gap in Italy
SSRN Electronic Journal, 2000
This paper investigates wage differentials between immigrants and natives in Italy along the entire wage distribution and try to account for them using information on observed characteristic of both populations. Analyses are based on data from the 2009 survey on "Income and Living Conditions of Households with Foreigners", the first nation-wide survey aimed at obtaining information on the socio-economic conditions of the foreign population living in Italy, and on the Italian sample of EU-SILC. Immigrants wage gap is disentangled according to three main dimensions: gender, immigrants length of stay in Italy and Italian language proficiency. We show the existence in the Italian labour market of a large wage differential between immigrants and natives which increases along the wage distribution suggesting the existence of a "glass ceiling effect" for immigrants workers. Moreover, we find evidence of (i) a large gender difference in the observed gap, with women showing a higher gap than men, (ii) an ongoing but largely incomplete assimilation process among the immigrant population and (iii) a lower gap for immigrants with higher language proficiency. Quantile regressions, Blinder-Oaxaca and Machado-Mata decompositions are applied. The counterfactual decomposition shows that individual characteristics account for only a small fraction of total observed differentials, sector controls increase the explained portion but do not account for the "glass ceiling" pattern of the gap, which instead disappears with occupation controls, suggesting that the upwardsloping shape of the (log) wage differential is a symptom of the occupational segregation characterizing the immigrant population in the Italian labour market. JEL Classification: J31, J61, F22.
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.
QUADERNI DI ECONOMIA DEL LAVORO
This paper aims at investigating the phenomenon of graduates' migration from an OECD country at a microeconomic level to offer insight into the scholarly debate on migration decisions of high-skilled workers living in a developed country. By merging data on employment conditions of Italian graduates with the results of an ad-hoc survey on Italian graduates working abroad, the paper assesses the selectivity of migration choices, the wage premium associated with migration decision on their earnings, and the determinants of the earning function for those graduates that work abroad. Results suggest a high complexity of both the selection and the earning function of high-skilled migrants coming from a developed country.