International mobility and the labor market

Abstract

Engdahl, M. 2013. International Mobility and the Labor Market. Uppsala universitet. Economic studies 139. 208 pp. Uppsala. ISBN 978-91-85519-46-0.

Essay I: (with Olof Åslund): We study the labor market impact of opening borders to low-wage countries. The analysis exploits time and regional variation provided by the 2004 EU enlargement in combination with transport links to Sweden from the new member states. The results suggest an adverse impact on earnings of present workers in the order of 1 percent in areas close to pre-existing ferry lines. The effects are present in most segments of the labor
market but tend to be greater in groups with weaker positions. The impact is also clearer in industries which have received more workers from the new member states, and for which across-the-border work is likely to be more common. There is no robust evidence on an impact on employment or wages. At least part of the effects is likely due to channels other than the ones typically considered in the literature.

Essay II: I study demand shifting effects of real exchange rate movements in border regions. Detailed geographic information on border crossings, the location of retail outlets, and where the population resides, allows me to explore the labor market effects of cross-border shopping. The impact is identified by comparing areas located close to the border with more remote areas.The relative effects are large; a ten percent decline in the value of the Swedish krona is followed by an increase in the number of employees in the retail industry by 3 percent. Similarly, the share of the population employed in retail increases by 0.3 percentage points and annual earnings by 2.7 percent.

Essay III:with Olof Åslund. We study the effects of performance bonuses in immigrant language training for adults. A Swedish policy pilot conducted in 2009–2010 gave a randomly assigned group of municipalities the right to grant substantial cash bonuses to recently arrived migrants. The results suggest substantial effects on average student achievement. But these were fully driven by metropolitan areas; in other parts of Sweden average performance was more or less unaffected. In line with theory, effects tend to be clearer where institutional features make the bonus more feasible, or where student characteristics suggest that the costs should be lower.

Essay IV: I study the association between naturalizations, labor market outcomes and familyformation. The results show that the economic outcomes of immigrants from outside the OECD, on average, improve following naturalization. A strict causal interpretation of the results is not possible as the outcomes start to improve already before the acquisition of citizenship. The study also shows that for migrants from some country groups there is a positive correlation between naturalizations and the likelihood of getting married and having children. This is suggestive of immigrants naturalizing for family reasons. Further, my findings illustrate that modeling assumptions are of great importance. Models that are not flexible enough could lead to false claims regarding causality.