The Dynamic Impact of Immigration on Natives' Labor Market Outcomes: Evidence from Israel

By Sarit Cohen-Goldner, M. D. Paserman. Social Science Research Network, 2011

158 citations recorded by the source corpus.

This paper studies the short and medium run impact of highly skilled immigrants from the Former Soviet Union to Israel on natives' wages and employment. If immigrants are relatively good substitutes for native workers, the impact of immigration will be largest immediately upon the immigrants' arrival, and may become smaller as the labor market adjusts to the supply shock. Conversely, if immigrants upon arrival are poor substitutes for natives, the initial effect of immigration is small, and increases over time as immigrants acquire local labor market skills and compete with native workers. We empirically examine these alternative hypotheses using data from Israel between 1989 and 1999. We find that wages of both men and women are negatively correlated with the fraction of immigrants with little local experience in a labor market segment. A 10 percent increase in the share of immigrants lowers natives' wages in the short run by 1–3 percent, but this effect dissolves after 4–7 years. This result is robust to a variety of different segmentations of the labor market, to the inclusion of cohort effects, and to different dynamic structures in the residual term of the wage equation. On the other hand, we do not find any effect of immigration on employment, neither in the short nor in the medium run.

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Citations in the corpus

Immigration and Prices (2007, background): “The estimates of and in column (9) of Table 3 are -0.”
Immigration and prices: quasi-experimental evidence from Syrian refugees in Turkey (2016, unknown): “, Lach (2007) and Cortes (2008), are discussed above in depth.”
The effect of immigration on the labor market performance of native-born workers: some evidence for Spain (2008, background): “3 There are, however, some studies which apply the “spatial correlations” approach to other host countries such as Hunt (1992) to France, Pischke and Velling (1997) to Germany, and Dolado et al. (1997) to Spain.”
The unemployment impact of immigration in OECD countries (2011, background): “Cohen-Goldner and Paserman (2004), studying the same migration episode through a skill-level approach, find a significant effect on wages, vanishing after four to seven years, but no effect on employment.”
The impact of Syrian refugees on natives’ labor market outcomes in Turkey: evidence from a quasi-experimental design (2017, methodology): “Studies using the Israel data generally report that wage effects do not exist in the short run, but they become large in the long run (see, e.g., Cohen-Goldner and Paserman (2011)).”
Immigration and the Economy of Cities and Regions (2014, background): “…the dynamics of the response to immigration, but observe the adjustment at the aggregate, rather than individual level, including Bacellos (2010), Cohen-Goldner and Paserman(2011) and Murray and Wozniak (2012). tracking how individual native workers’ productivity changes as they shift across…”