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The wage gap between newly arriving immigrants and comparable natives in the United States has widened substantially over the last few decades while the subsequent speed of convergence has declined. These patterns have led to a pessimistic view regarding wage assimilation prospects of immigrants. This paper unravels an unexplored mechanism that can explain an important part of these regularities: labor market competition. Because immigrants and natives are imperfect substitutes in production, increasing immigrant inflows exert stronger labor market competition on previous cohorts of immigrants than on natives, contributing to a widening wage gap. We quantify the importance of this mechanism using a model that accounts for the main features of the literatures on the wage impact of immigration and immigrant wage assimilation. Our results suggest that, if competition and composition effects are netted out, immigrant cohorts are more positively selected in recent decades, with these differences disappearing after 10 years, implying a lower relative wage growth for recent cohorts.

In this paper, we investigate wage losses from displacement in the manufacturing sector. We start by documenting that manufacturing firms traditionally employed low- and high-wage workers (measured as an AKM worker fixed effect) in similar proportions and paid substantial wage premiums (measured as an AKM firm fixed effect) to both types of workers. Over time, manufacturing jobs disproportionally disappeared over time, particularly so for low wage workers. We find that even though low and high wage workers suffer similar wage losses upon displacement on average, low wage workers experience substantially larger losses in their firm wage premiums, in part because they are more likely to move out of manufacturing and into low knowledge service sectors where firm wage premiums are low. Wage losses and losses in firm wage premiums upon displacement have increased over time especially for low wage workers, in part because low wage workers are increasingly re-employed in low knowledge service jobs.

This paper presents first evidence for the opposing effects of imports and exports at the extensive and intensive employment margins. While soaring imports from China are associated with a higher probability of plant closure, exports have the opposite effect. Imports work through the extensive margin of plant closure only, whereas exports have an effect on employment through both margins. Plant closures occur at a lower probability in labor market segments with heightened export opportunities and these plants tend to expand employment. Moreover, we analyze potential interaction effects. Our analysis shows that i) lower domestic competition reduces the impact of both imports and exports on the probability of plant closure, ii) plants with higher productivity are less likely to react to the import shock and iii) a higher routine-task intensity favors the selection of plants due to import competition.

We study whether women and men cope with job loss differently. We use 2006-2017 Dutch administrative monthly microdata and a quasi-experimental design involving job displacement because of firm bankruptcy. We find that displaced women are more likely than displaced men to take up a flexible job with limited working hours and short commutes. However, displaced women experience longer unemployment durations and comparable hourly wage losses. Displaced expectant mothers experience relatively high losses in employment and working hours. Our findings suggest that the costs of job flexibility for displaced female workers come through longer unemployment instead of higher losses in wages.

With rapid advancements in automation technology and artificial intelligence (AI), the question of how technological changes affect work has regained attention in recent decades. Similar to fears in earlier times, policy makers, the public and scientists alike are concerned about technology-driven job losses. While there is little evidence suggesting that predictions of disappearing work will materialize anytime soon, it is also clear that the nature of work is changing rapidly, demanding high degrees of adaptability of workers. We use administrative, individual-level panel data for West Germany from 1990 to 2005 to examine how workers have navigated the labor market in recent decades. To frame our empirical analysis, we construct a simple model of workers' decisions regarding the tasks they perform and occupational mobility in the face of changing task content of production. We find that workers alter the tasks they perform at the workplace and also use occupational mobility to adjust to those changing demands. The results also suggest that resilient workers forgo wage increases but, instead, experience higher future employment stability.

Unemployment insurance systems in modern labor markets are riddled with a multitude of rules and regulations governing job seekers' economic situation and their incentives to search for employment. These include, for instance, detailed regulations specifying individuals' benefit level and potential benefit duration, job search requirements, conditions for avoiding benefit sanctions, possibilities for earning extra income or additional benefit entitlements by working in part-time or short-term jobs, etc. The complexity of UI systems makes it challenging for job seekers to understand the prevailing rules, their built-in incentives, and the resulting consequences for their personal economic situation. This is potentially problematic, as a lack of understanding may distort individuals' job search incentives and employment prospects.

In this paper, we report the results from a randomized controlled trial among the universe of registered Danish job seekers that studies how reducing complexity affects individuals' understanding of UI benefit rules and labor market behavior. Our intervention exploits an online information tool that provides individuals with continuously updated, personalized information on their remaining UI benefit period, their accumulated working time that can be used to prolong the potential benefit duration, as well as information on essential rules regarding job seekers' benefit duration and benefit sanctions. We match the data from our experiment with data from an online survey and rich information from administrative records to evaluate the causal effects of our intervention on individuals' understanding of the prevailing labor market rules, their job search behavior, and resulting labor market outcomes.

We investigate how negatively reciprocal traits of unemployed individuals interact with “sticks" policies imposing constraints on individual job search effort in the context of the German welfare system. For this we merge survey data of long-term unemployed individuals, containing indicators of reciprocity as a personality trait, to a unique set of register data on all unemployed coached by the same team of caseworkers and their treatments. We find that the combination of a higher negative reciprocity and a stricter regime have a negative interaction effect on search effort exerted by the unemployed. The results are stronger for males than for females. Stricter regimes may therefore drive long-term unemployed males with certain types of social preferences further away from the labor market.

I will talk a bit on how we use machine learning in general in the area of labour market policy in DK, and how we relate this to our core business of producing results on employment and education.
As a specific example of our work, I will illustrate our statistical profiling of newly unemployed, both the technical/methodological side as well as the practical implementation and general experiences in this area, and some thoughts on further development.
Finally I will talk a bit on other more recent areas of developing datadriven solutions in the field of labour market policy, drawing perspectives to new possibilities deriving from machine-learning and modern Technology.

The presentation is about the nature and how to clean errors in occupational coding in order to measure patterns of occupational mobility (US, UK and Canada). Furthermore it is shed light on how occupational mobility matters for cyclical earnings inequality (based on Carrillo-Tudela, Visschers and Wiczer, 2019), unemployment and its duration distribution (based on Carrillo-Tudela and Visschers, 2019) and cleansing and sullying effects of the business cycle (based on Carrillo-Tudela, Sumerfield and Visschers, 2019).

Using a quasi maximum likelihood approach for a semi-structural model, we find highly precise and distinct estimates of consumption responses to idiosyncratic income shocks for different groups of households. Homeowners stratified by liquid wealth exhibit the most dispersion in their marginal propensities to consume. Time-varying estimates support strong patterns of heterogeneity by homeownership status and balance sheet liquidity, with economically and statistically significant increases in the sensitivity of transitory consumption for homeowners, especially those with lower liquid wealth, following the collapse in house prices with the Great Recession. These findings support consumption theories that include housing as an illiquid asset.