Identifying Earnings Assimilation of Immigrants Under Changing Macroeconomic Conditions

22 Pages Posted: 16 May 2004

See all articles by Erling Barth

Erling Barth

Institute for Social Research, Norway; Department of Economics, University of Oslo; IZA Institute of Labor Economics

Bernt Bratsberg

Kansas State University - Department of Economics; University of Oslo - Ragnar Frisch Centre for Economic Research

Oddbjorn Raaum

University of Oslo - Ragnar Frisch Centre for Economic Research

Abstract

Failure to account for differences between immigrants and natives in their responsiveness to changes in macroeconomic conditions may bias estimates of assimilation effects on immigrant earnings. Using Norwegian register data from 1980 to 1996, we first establish that earnings of immigrants from non-OECD countries exhibit greater sensitivity to local unemployment than do earnings of natives. The empirical analysis further reveals that standard methods of estimation - which fail to consider differential immigrant and native responsiveness - understate earnings growth and overstate cohort differentials among non-OECD immigrants. These biases are attributable to trends in macroeconomic conditions over the sample period.

Suggested Citation

Barth, Erling and Bratsberg, Bernt and Raaum, Oddbjørn, Identifying Earnings Assimilation of Immigrants Under Changing Macroeconomic Conditions. Available at SSRN: https://ssrn.com/abstract=537947

Erling Barth (Contact Author)

Institute for Social Research, Norway ( email )

Munthesgate 31
0260 Oslo
Norway

Department of Economics, University of Oslo ( email )

PO Box 6706 St Olavs plass
Oslo, N-0317
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Bernt Bratsberg

Kansas State University - Department of Economics ( email )

Manhattan, KS 66502-4001
United States

University of Oslo - Ragnar Frisch Centre for Economic Research

Gaustadalleen 21
N-0349 Oslo
Norway

Oddbjørn Raaum

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

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