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on Labour Economics |
| By: | Amuedo-Dorantes Catalina (San Diego State University); Delia Furtado (University of Connecticut); Huanan Xu (Indiana University South Bend) |
| Abstract: | Academia and the public media have emphasized the link between STEM majors and innovation as well as the need for STEM graduates in the U.S. economy. Given the proclivity of international students to major in STEM fields, immigration policy may be used to attract and retain high-skilled STEM workers in the United States. We examine the impacts of a 2008 policy extending the Optional Practical Training (OPT) period for STEM graduates. Using data from the National Survey of College Graduates, we find that, relative to other foreign-born U.S. college graduates, the foreign-born who first came on student visas were 18 percent more likely to have their degrees in STEM fields if they enrolled in their major after the OPT policy change. While part of this increase is likely due to the rather mechanical drop in return migration among STEM graduates following the OPT change, the policy also appears to have induced some international students, who may have otherwise chosen a different field, to major in STEM. |
| Keywords: | Optional Practical Training, H-1B visas, foreign-born workers, United States |
| JEL: | F22 J61 J68 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1906&r=all |
| By: | Michael Amior |
| Abstract: | Geographical mobility is known to be crucial to the adjustment of local labor markets. But there is severe inequity in the incidence of mobility: better educated Americans make many more long-distance moves. I argue this is a consequence of larger wage offer dispersion, independent of geography. In a thin labor market, this generates larger wage rents (in excess of workers' reservations) in new job matches, particularly for younger workers who are just beginning their careers. If an offer happens to arrive from a distant location, these larger rents are more likely to justify the cost of moving - even if the offer distribution is invariant geographically. Also, local job creation will elicit a larger migratory response. I motivate my claims with new evidence on mobility patterns and subjective moving costs. And I test my hypothesis by estimating wage returns to local and long-distance job matching over the jobs ladder. Though I focus on education differentials, this paper offers new insights for understanding geographical immobility more generally. |
| Keywords: | geographical mobility, job matching, education |
| JEL: | J61 J64 R23 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1616&r=all |
| By: | Andrew Mountford; Jonathan Wadsworth |
| Abstract: | While skilled immigration ceteris paribus provides an immediate boost to GDP per capita by adding to the human capital stock of the receiving economy, might it also reduce the number of 'good jobs', i.e. those with training, available to indigenous workers? This paper analyzes this issue theoretically and empirically. The theoretical model shows how skilled immigration may affect the sectoral allocation of labor and how it may have a positive or negative effect on the training and social mobility of native born workers. The empirical analysis uses UK data from 2001 to 2018 to show that training rates of UK born workers have declined in a period where immigration has been rising strongly, and have declined significantly more in high wage non-traded sectors. At the sectoral level however this link is much less strong but there is evidence of different effects of skilled immigration across traded and non-traded sectors and evidence that the hiring of UK born workers in high wage non-traded sectors has been negatively affected by skilled immigration, although this effect is not large. Taken together the theoretical and empirical analyses suggest that skilled immigration may have some role in allocating native born workers away from 'good jobs' sectors but it is unlikely to be a major driver of social mobility. |
| Keywords: | immigration, training, income distribution |
| JEL: | J6 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1618&r=all |
| By: | Kenneth A. Castellanos; Garth Heutel |
| Abstract: | We develop a computable general equilibrium model of the United States economy to study the unemployment effects of climate policy and the importance of cross-sectoral labor mobility. We consider two alternate extreme assumptions about labor mobility: either perfect mobility, as is assumed in much previous work, or perfect immobility. The effect of a $35 per ton carbon tax on aggregate unemployment is small and similar across the two labor mobility assumptions (0.2–0.3 percentage points). The effect on unemployment in fossil fuel sectors is much larger under the immobility assumption – a 30 percentage-point increase in the coal sector – suggesting that models omitting labor mobility frictions may greatly under-predict sectoral unemployment effects. Returning carbon tax revenue through labor tax cuts can dampen or even reverse negative impacts on unemployment, while command-and-control policies yield larger unemployment effects. |
| JEL: | C68 H23 J62 Q52 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25797&r=all |
| By: | Nikolova, Milena; Popova, Olga; Otrachshenko, Vladimir |
| Abstract: | We show that current differences in trust levels within former Soviet Union countries can be traced back to the system of forced prison labor during Stalin's rule, which was marked by high incarceration rates, repression, and harsh punishments. We argue that those exposed to forced labor camps (gulags) became less trusting and transferred this social norm to their descendants. Combining contemporary individual-level survey data with historical information on the location of forced labor camps, we find that individuals who live near former gulags have low levels of social and institutional trust. Our results are robust to a battery of sensitivity checks, which suggests that the relationship we document is causal. We outline several causal mechanisms and test whether the social norm of mistrust near gulags developed because of political repression or due to fear that inmates bring criminality. As such, we provide novel evidence on the channels through which history matters for current socio-economic outcomes today. |
| Keywords: | social trust,institutional trust,trustworthiness,forced labor,economic history,former Soviet Union |
| JEL: | D02 H10 N94 Z13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:344&r=all |
| By: | Escamilla-Guerrero David; Lopez-Alonso Moramay |
| Abstract: | Using height as a proxy for physical productivity of labour, this paper estimates the selection of Mexican migration to the United States at the beginning of the flow (1906–08), and it exploits a natural experiment of history to evaluate the impact of random shocks on short-run shifts in selection into migration.The results suggest that the first Mexican migrants belonged to the upper ranks of the height distribution of the Mexican working class. Additionally, the financial crisis of 1907, an exogenous labour demand shock in the United States, significantly modified local migrant self-selection. Before the crisis, migrants were positively selected relative to the military elite of the time. During the crisis, migrants became negatively selected, but returned to a stronger positive selection after the crisis.The shift to a less positive selection was influenced by the absence of the enganche, an institution that neutralized mobility and job-search costs. The stronger positive selection in the post-crisis period was partially driven by persistent droughts in Mexico that increased the population at risk of migration. |
| Keywords: | International migration,Labour migration,random shocks,Self-selection |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2019-23&r=all |
| By: | Sahnoun, Marwa; Abdennadher, Chokri |
| Abstract: | This paper studies the effects and causal links between the shadow economy and the unemployment rate using a dynamic simultaneous-equation panel data model for 38 developing and 40 developed countries over the 2000−2015 period. The analysis suggests that there is a unidirectional and negative causality running from the unemployment rate to the shadow economy in the developing countries. However, in the developed countries, there is a bidirectional and negative causal relationship between the shadow economy and unemployment rate. The sensitivity of the results makes the authors realize that institutional quality interacts strongly with the relationship between the shadow economy and the unemployment rate. In countries with a good institutional quality, the unemployment rate is associated with a weak informal economy, whereas in countries with low institutional quality, it strongly drives the informal economy. |
| Keywords: | shadow economy,unemployment rate,institutional quality,dynamic simultaneous-equation panel data models |
| JEL: | O17 E26 J60 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201930&r=all |
| By: | Schmöller, Michaela |
| Abstract: | I propose a two-sector endogenous growth model with heterogeneous sectoral productivity and sector-specific, nonlinear hiring costs to analyse the link between sectoral resource allocation, low productivity growth and stagnant real wages. My results suggest that an upward shift in the labor supply, triggered for instance by a labor market reform, as among others implemented in Germany in 2003-2005, is beneficial in the long-run as it raises growth of technology, labor productivity and real wages. I show, however, that in the immediate phase following the labor supply shock, labor productivity and real wages stagnate as employment gains are initially disproportionally allocated to low-productivity sectors, limiting the capacity for technology growth and depressing real wages and productivity. I demonstrate that due to the learning-by-doing growth externality in the high-productivity sector the competitive equilibrium is ineffcient as firms fail to internalize the effect of their labor allocation on aggregate growth. Subsidies to high-productivity sector production can alleviate welfare losses along the transition path. |
| JEL: | E20 E24 E60 O40 O41 |
| Date: | 2019–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2019_008&r=all |