Institute for the Study of Labor

About: Institute for the Study of Labor is a nonprofit organization based out in Bonn, Germany. It is known for research contribution in the topics: Wage & Unemployment. The organization has 2039 authors who have published 13475 publications receiving 439376 citations.

Give Me Your Wired and Your Highly Skilled: Measuring the Impact of Immigration Policy on Employers and Shareholders

Abstract: The paper links finance theory to labor economics and political economy in the context of migration and immigration policy. Most research treating the impact of immigration has focused on the consequences for employees as measured by wages, earnings, and employment. Less is known about the impact on employers. We lack answers to basic questions concerning the quantitative impact of immigrants on employer profit, and which employers are most likely to gain (suffer) increased (reduced) profits as a result of immigration. Using event study analysis, I measure the impact of immigration policy on the profit of employers and shareholders, particularly in those industries with high needs for skilled immigrants. The American Competitiveness and Workforce Improvement Act (ACWIA) of 1998 nearly doubled the available number of H-1B visas for skilled foreign workers in FY 1999. It was the first time that the U.S. government raised the annual cap of H-1B visa since 1990. I focus on this bill and analyze whether and by how much its passage increased shareholders’ profit. The empirical results show that employers and shareholders in the top H-1B visa user industries enjoyed significant and positive returns with the passage of the ACWIA of 1998. Shareholders in high-tech industries (the top users of H-1B visa, 80% of total) such as "Computers and related equipment", and "Computer and data processing services" gained, respectively, an average 21.54% (15.88 if weighted) and 22.77% (18.11 if weighted) in cumulative excess returns in the month after the Act was passed, while industries with little need for H-1B visas experienced no significant changes in cumulative excess returns. Robustness testing including international factor comparisons, semiparametric modeling and a sample-split Chow structural break test support the results.

Spatial Mismatch or Racial Mismatch

Abstract: We contrast the spatial mismatch hypothesis with what we term the racial mismatchhypothesis - that the problem is not a lack of jobs, per se, where blacks live, but a lack of jobsinto which blacks are hired, whether because of discrimination or labor market networks inwhich race matters. We first report new evidence on the spatial mismatch hypothesis, using data from Census Long-Form respondents. We construct direct measures of the presence of jobs in detailed geographic areas, and find that these job density measures are related to employment of black male residents in ways that would be predicted by the spatial mismatch hypothesis - in particular that spatial mismatch is primarily an issue for low-skilled black male workers. We then look at racial mismatch, by estimating the effects of job density measures that are disaggregated by race. We find that it is primarily black job density that influences black male employment, where as white job density has little if any influence on their employment. This evidence implies that space alone plays a relatively minor role in low black male employment rates.

Evaluating Microfoundations for Aggregate Price Rigidities: Evidence from Matched Firm - Level Data on Product Prices and Unit Labor Cost

Abstract: Using data on product-level prices matched to the producing firm's unit labor cost, we reject the hypothesis of a full and immediate pass-through of marginal cost. Since we focus on idiosyncratic variation, this does not fit the predictions of the Mackowiak and Wiederholt (2009) version of the Rational Inattention Model. Neither do we find that firms react strongly to predictable marginal cost changes, as expected from the Mankiw and Reis (2002) Sticky Information Model. We find that, in line with Staggered Contracts models, firms consider both the current and future expected marginal cost when setting prices with a sum of coefficients not significantly different from unity.

Ethnic Identification, Intermarriage, and Unmeasured Progress by Mexican Americans

Abstract: Using Census and CPS data, we show that U.S.-born Mexican Americans who marry non- Mexicans are substantially more educated and English proficient, on average, than are Mexican Americans who marry co-ethnics (whether they be Mexican Americans or Mexican immigrants). In addition, the non-Mexican spouses of intermarried Mexican Americans possess relatively high levels of schooling and English proficiency, compared to the spouses of endogamously married Mexican Americans. The human capital selectivity of Mexican intermarriage generates corresponding differences in the employment and earnings of Mexican Americans and their spouses. Moreover, the children of intermarried Mexican Americans are much less likely to be identified as Mexican than are the children of endogamous Mexican marriages. These forces combine to produce strong negative correlations between the education, English proficiency, employment, and earnings of Mexican-American parents and the chances that their children retain a Mexican ethnicity. Such findings raise the possibility that selective ethnic “attrition” might bias observed measures of intergenerational progress for Mexican Americans.

Migration in an Enlarged EU: A Challenging Solution?

Abstract: The 2004 and 2007 enlargements of the European Union were unprecedented in a number of economic and policy aspects This essay provides a broad and in-depth account of the effects of the post-enlargement migration flows on the receiving as well as sending countries in three broader areas: labour markets, welfare systems, and growth and competitiveness Our analysis of the available literature and empirical evidence shows that (i) EU enlargement had a significant impact on migration flows from new to old member states, (ii) restrictions applied in some of the countries did not stop migrants from coming but changed the composition of the immigrants, (iii) any negative effects in the labour market on wages or employment are hard to detect, (iv) post-enlargement migration contributes to growth prospects of the EU, (v) these immigrants are strongly attached to the labour market, and (vi) they are quite unlikely to be among welfare recipients These findings point out the difficulties that restrictions on the free movement of workers bring about