Consequences of Immigrating During a Recession: Evidence from the US Refugee Resettlement Program

Mask, Joshua (2018): Consequences of Immigrating During a Recession: Evidence from the US Refugee Resettlement Program.

Abstract

I examine long-term employment and wage consequences for refugees who immigrate to the United States under different business cycle conditions. It is difficult to causally identify the relationship between initial economic conditions and subsequent outcomes for most immigrants because they can choose when and where they immigrate. However, refugees offer a unique opportunity to empirically measure these outcomes because their dates of arrival and states of placement are exogenously chosen through the US Refugee Resettlement Program. For every one percentage point increase in the national unemployment rate at arrival, refugees on average experience a 2.99% reduction in wages five years later and a 1.8 percentage point reduction in employment four years later. Estimates using state unemployment rate at arrival show less persistence suggesting mobility or differential economic improvement across states may be important in mitigating these effects. I also divide the sample across gender and educational attainment. I find no evidence of wage scarring for uneducated males but observe a 4.85% reduction in wages five years later for high school-educated males and a 5.29% reduction in wages four years later for college-educated.

• Item Type: MPRA Paper
• Language: English
• Keywords: Immigration, Labor Market Outcomes, Settlement Policies, Recession
• Subjects: J - Labor and Demographic Economics > J1 - Demographic Economics > J15 - Economics of Minorities, Races, Indigenous Peoples, and Immigrants ; Non-labor Discrimination; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Labor Contracts; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers

References

Arafah, R. B. (2016). ”Predicting Economic Incorporation Among Newly ResettledRefugees in the United States: A Micro-Level Statistical Analysis.” UC Berkeley. Pro-Quest ID: Arafahberkeley0028E16109. Merritt ID: ark:/13030/m5x9705r. Retrievedfrom https://escholarship.org/uc/item/7rp436r0[2]

Aslund O., Rooth D. (2007). ”Do when and where matter? Initial labour market con-ditions and immigrant earnings.” Economic Journal, 117, (518), 422-448[3]

Beaman, L. (2012). ”Social Networks and the Dynamics of Labour Market Outcomes:Evidence from Refugees Resettled in the U.S.” The Review of Economic Studies, Volume79, Issue 1, 1 January 2012, Pages 128 to 161, https://doi.org/10.1093/restud/rdr017[4]

Beaudry P., DiNardo J., (1991). ”The Effect of Implicit Contracts on the Movementof Wages over the Business Cycle: Evidence from Micro Data.” Journal of Political Economy, 99, (4), 665-88[5]

Chiswick, B. R., et al. (1997). The Labor Market Status of Immigrants: Effects ofthe Unemployment Rate at Arrival and Duration of Residence. Industrial and LaborRelations Review, vol. 50, no. 2, pp. 289303. JSTOR, www.jstor.org/stable/2525087.[6]

Ellwood, D. (1982). ”Teenage Unemployment: Permanent Scars or Temporary Blem-ishes?” The Youth Labor Market Problem: Its Nature, Causes and Consequences, edited by Richard B. Freeman and David A. Wise, pp. 349-390. Chicago: University of ChicagoPress.[7]

Godøy A., (2017). ”Local labor markets and earnings of refugee immigrants” EmpiricalEconomics, Springer, vol. 52(1), pages 31-58, February.[8]

Kahn, L. B., (2010). ”The long-term labor market consequences of graduating fromcollege in a bad economy.” Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.23

Oreopoulos, P., et al. (2012). ”The Short- and Long-Term Career Effects of Graduatingin a Recession.” American Economic Journal: Applied Economics, 4 (1): 1-29.[10] Ruggles S., et al. (2017). Integrated Public Use Microdata Series: Version 7.0 [dataset].Minneapolis, MN: University of Minnesota. https://doi.org/10.18128/D010.V7.0[11]

Ruhm, C. (1991). ”Are Workers Permanently Scarred by Job Displace-ments?” The American Economic Review,81(1),319-324. Retrieved fromhttp://www.jstor.org/stable/200680[12]

Zong, J., Zong, J. B.,Batalova, J. (2017). ”Refugees and Asylees in the UnitedStates.” Retrieved from https://www.migrationpolicy.org/article/refugees-and-asylees-united-state