This paper studies the labor market effects of regularization programs on amnestied migrants’ job competitors. Exploiting the 2002 unexpected Italian program, I find that the least productive job competitors experience a lower probability of being regularly employed in the very few months following the amnesty implementation. To explain the results, I develop a theoretical model showing that bundling strict application requirements and new penalties for hiring undocumented workers lowers job competitors’ regular employment.
Integration programs play a key role in increasing the economic assimilation of immigrants. However, these programs might affect also labor market outcomes of people who are not directly involved in the program. The aim of this paper is to provide an econometric model that studies whether integration programs have adverse effects on labor market outcomes within skill groups. The model relies on the post-treatment discontinuity in the labor force participation of individuals around the threshold to identify the spillover effects on labor market outcomes of individuals further from the threshold. The causal identification is possible for two reasons: people have the same characteristics, and, the treatment assignment is as good as random at the threshold. To test the model, I take advantage of a natural experiment in France where immigrants are more likely to attend a language training course if they score below a given threshold in a French language test. Results show that an increase in labor force participation of eligible migrants has a negative spillover effects on the probability of participating in the labor force and also of being employed for the whole skill group.
Selected Work in Progress
Imperfect Substitutability Between Old And Young Workers (joint with Alessandra Di Pietro)
Employment rate of older workers in Italy has increased over the last decade, meanwhile youth employment rate have experienced a big decline. These divergent employment paths raise a question about the substitutability between old and young workers. In order to answer that question, we propose a novel identification strategy to estimate the elasticity of substitution in production between old and young workers. We start setting the labor demand functions for both groups within the same region-occupation-time group to estimate such elasticity. Then, we develop a theoretical model that shows towards-zero estimation bias induced by time correlations within each region-occupation-time group. To overcome this estimation problem, we use a set of instruments based on yearly employment changes by age and citizenship. Using yearly Italian administrative data for the period 1995-2004, we exploit a number of pension and labor migration reforms to create a set of exogenous instruments to time correlations within a region-occupation-time group. Finally, we find that old and young employees within the same region-occupation-time cell experience imperfect substitutability in production.
Working Age Increase and Educational Choice