Hannah Illing, Institute for Employment Research - The Biggest Loser: Costs of Job Loss for Migrants and Natives

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Melbourne Institute Seminar

Title: The Biggest Loser: Costs of Job Loss for Migrants and Natives
(joint work with Theresa Koch)

Abstract: We are the first to provide empirical evidence on differences in individual costs of job loss for migrants compared to natives in Germany. Using linked employer-employee data in 1996-2017, we compute each displaced workers' earnings, wage, and employment loss after a mass layoff in comparison to a matched, non-displaced, control worker. We find that migrants face substantially higher earnings losses than natives, due to both higher wage and employment losses. Differences in individual characteristics and differential sorting across industries and occupations can fully explain the gap in wage losses but not the employment gap after displacement. Laid-off migrants are both less likely to become re-employed, and they work fewer days than laid-off natives. In terms of channels, we show that i) migrants sort into worse establishments, and ii) migrants' slightly lower geographic mobility across federal states may explain part of their lower re-employment success; iii) our results suggest that competition from other migrants, rather than natives, negatively contributes to migrants' costs of job loss.

Presenter:  Hannah Illing, Institute for Employment Research (IAB)

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