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We classify the empirical literature on the wage impact of immigration into three groups, where studies in the first two groups estimate different relative effects, and studies in the third group estimate the total effect of immigration on wages. We interpret the estimates obtained from the different approaches through the lens of the canonical model to demonstrate that they are not comparable. We then relax two key assumptions in this literature, allowing for inelastic and heterogeneous labor supply elasticities of natives and the \"downgrading\" of immigrants. “Downgrading” occurs when the position of immigrants in the labor market is systematically lower than the position of natives with the same observed education and experience levels. Downgrading means that immigrants receive lower returns to the same measured skills than natives when these skills are acquired in their country of origin. We show that heterogeneous labor supply elasticities, if ignored, may complicate the interpretation of wage estimates, and particularly the interpretation of relative wage effects. Moreover, downgrading may lead to biased estimates in those approaches that estimate relative effects of immigration, but not in approaches that estimate total effects. We conclude that empirical models that estimate total effects not only answer important policy questions, but are also more robust to alternative assumptions than models that estimate relative effects.

When jobs offered by different employers are not perfect substitutes, employers gain wage-setting power; the extent of this power can be captured by the elasticity of labor supply to the firm. The authors collect 1,320 estimates of this parameter from 53 studies. Findings show a prominent discrepancy between estimates of direct elasticity of labor supply to changes in wage (smaller) and the estimates converted from inverse elasticities (larger), suggesting that labor market institutions may rein in a substantial amount of firm wage-setting power. This gap remains after they control for 22 additional variables and use Bayesian Model Averaging and LASSO to address model uncertainty; however, it is less pronounced for studies employing an identification strategy. Furthermore, the authors find strong evidence that implies the literature on direct estimates is prone to selective reporting: Negative estimates of the elasticity of labor supply to the firm tend to be discarded, leading to upward bias in the mean reported estimate. Additionally, they point out several socioeconomic factors that seem to affect the degree of monopsony power.

We estimate a dynamic model of employment, human capital accumulation—including education, and savings for women in the United Kingdom, exploiting tax and benefit reforms, and use it to analyze the effects of welfare policy. We find substantial elasticities for labor supply and particularly for lone mothers. Returns to experience, which are important in determining the longer-term effects of policy, increase with education, but experience mainly accumulates when in full-time employment. Tax credits are welfare improving in the U.K., increase lone-mother labor supply and marginally reduce educational attainment, but the employment effects do not extend beyond the period of eligibility. Marginal increases in tax credits improve welfare more than equally costly increases in income support or tax cuts.

Recent literature analysing wage effects of immigration assumes labour supply is fixed across education-experience cells. This article departs from this assumption estimating a labour market equilibrium dynamic discrete choice model on U.S. micro-data for 1967–2007. Individuals adjust to immigration by changing education, participation, and/or occupation. Adjustments are heterogeneous: 4.2–26.2% of prime-aged native males change their careers; of them, some switch to white-collar careers and increase education by about three years; others reduce labour market attachment and reduce education also by about three years. These adjustments mitigate initial effects on wages and inequality. Natives that are more similar to immigrants are the most affected on impact, but also have a larger margin to adjust and differentiate. Adjustments also produce a self-selection bias in the estimation of wage effects at the lower tail of the distribution, which the model corrects.

This article reviews evidence on the labor market performance of Hispanics in the United States, with a particular focus on the US-born segment of this population. After discussing critical issues that arise in the US data sources commonly used to study Hispanics, we document how Hispanics currently compare with other Americans in terms of education, earnings, and labor supply, and then we discuss long-term trends in these outcomes. Relative to non-Hispanic Whites, US-born Hispanics from most national origin groups possess sizeable deficits in earnings, which in large part reflect corresponding educational deficits. Over time, rates of high school completion by US-born Hispanics have almost converged to those of non-Hispanic Whites, but the large Hispanic deficits in college completion have instead widened. Finally, from the perspective of immigrant generations, Hispanics experience substantial improvements in education and earnings between first-generation immigrants and the second-generation consisting of the US-born children of immigrants. Continued progress beyond the second-generation is obscured by measurement issues arising from high rates of Hispanic intermarriage and the fact that later-generation descendants of Hispanic immigrants often do not self-identify as Hispanic when they come from families with mixed ethnic origins.

Concerns over the supply of skills in the U.S. labor force, especially education-related skills, have exploded in recent years with a series of reports not only from employer-associated organizations but also from independent and even government sources making similar claims. These complaints about skills are driving much of the debate around labor force and education policy, yet they have not been examined carefully. In this article, the author assesses the range of these charges as well as other evidence about skills in the labor force. Very little evidence is consistent with the complaints about a skills shortage, and a wide range of evidence suggests the complaints are not warranted. Indeed, a reasonable conclusion is that overeducation remains the persistent and even growing condition of the U.S. labor force with respect to skills. The author considers three possible explanations for the employer complaints and the associated policy implications.

\"Immigration to the UK, particularly among more educated workers, has risen appreciably over the past 30 years and as such has raised labor supply. However studies of the impact of immigration have failed to find any significant effect on the wages of native-born workers in the UK. This is potentially puzzling since there is evidence that changes in the supply of educated natives have had significant effects on their wages. Using a pooled time series of British cross-sectional micro data on male wages and employment from the mid-1970s to the mid-2000s, this paper offers one possible resolution to this puzzle, namely that in the UK natives and foreign born workers are imperfect substitutes. We show that immigration has primarily reduced the wages of immigrants -- and in particular of university educated immigrants -- with little discernable effect on the wages of the native-born.\" (Author's abstract, IAB-Doku). Die Untersuchung enthält quantitative Daten. Forschungsmethode: empirisch-quantitativ; empirisch; Querschnitt; Längsschnitt. Die Untersuchung bezieht sich auf den Zeitraum 1975 bis 2005.

\"The careers of MBAs from a top US business school are studied to understand how career dynamics differ by gender. Although male and female MBAs have nearly identical earnings at the outset of their careers, their earnings soon diverge, with the male earnings advantage reaching almost 60 log points a decade after MBA completion. Three proximate factors account for the large and rising gender gap in earnings: differences in training prior to MBA graduation, differences in career interruptions, and differences in weekly hours. The greater career discontinuity and shorter work hours for female MBAs are largely associated with motherhood.\" Die Untersuchung enthält quantitative Daten. Forschungsmethode: Sekundäranalyse; empirisch; empirisch-quantitativ. Die Untersuchung bezieht sich auf den Zeitraum 1990 bis 2006. (author's abstract, IAB-Doku).

This paper gives an overview of current thinking by economists about the consequences of ongoing technological progress for labour markets, and discusses policy implications. In economics, the impact of technological progress on labour markets is understood by the following two channels: (i) the nature of interactions between differently skilled workers and new technologies affecting labour demand and (ii) the equilibrium effects of technological progress through consequent changes in labour supply and product markets. The paper explains how the ongoing Digital Revolution is characterized by a complex interplay between worker skills and digital capital in the workplace, and consequent changes in job mobility for workers and in output prices affecting consumer demand for goods and services. In particular, it explains how current worker–technology interactions and the equilibrium effects they entail combine to create economy-wide job polarization with winners and losers from ongoing technological progress. The paper therefore concludes by discussing a set of policy interventions to ensure that the benefits of the Digital Revolution are broadly shared.

We study how parental leave benefit levels affect household labor supply, family income, and child outcomes, exploiting the speed premium (SP) in the Swedish leave system. The SP grants mothers higher benefits for a subsequent child without reestablishing eligibility through market work if two births occur within a prespecified interval. We use the spacing eligibility cutoffs in a regression discontinuity framework and find that the SP improves educational outcomes of the older child but not those of the younger. Impacts are likely driven by increased maternal time and the quality of maternal time relative to the counterfactual mode of care.