How Do Regulated and Unregulated Labor Markets Respond to Shocks? Evidence from Immigrants During the Great Recession
1
ECON -
Département d'économie (Sciences Po)
2 CEPR - Center for Economic Policy Research
3 PSE - Paris School of Economics
4 PJSE - Paris Jourdan Sciences Economiques
5 University of Southampton
6 DIAL - Développement, institutions et analyses de long terme
7 LEDa - Laboratoire d'Economie de Dauphine
8 Center for population change
2 CEPR - Center for Economic Policy Research
3 PSE - Paris School of Economics
4 PJSE - Paris Jourdan Sciences Economiques
5 University of Southampton
6 DIAL - Développement, institutions et analyses de long terme
7 LEDa - Laboratoire d'Economie de Dauphine
8 Center for population change
Sergei Guriev
- Fonction : Auteur
- PersonId : 968402
- IdHAL : sergei-guriev
- ORCID : 0000-0001-6048-2169
- IdRef : 146487192
Biagio Speciale
- Fonction : Auteur
- PersonId : 933081
- IdHAL : biagio-speciale
- ORCID : 0009-0007-0832-5415
Résumé
We study wage adjustment during the recent crisis in Italy using a unique dataset on immigrant workers that includes those employed in formal and informal sector. We find that before the crisis immigrants’ wages in the formal and informal sectors moved in parallel (with a 15% premium in the formal labor market). During the crisis, however, formal wages did not adjust down while wages in the unregulated informal labor market fell so that by 2013 the gap had grown to 32%. The difference was particularly salient for workers in occupations where the minimum wage is likely to be binding, and in “simple” occupations where there is high substitutability between immigrant and native workers. Calibrating a simple partial equilibrium model of spillovers between formal and informal markets, we find that less than 10% of workers who lost a formal job during the crisis move to the informal sector. We also find that if the formal sector wages were fully flexible, the decline in formal employment would be in the range of 1.5–4.5%—much lower than 16% decline that we observe in the data.
Domaines
Economies et financesFormat du dépôt | Fichier |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
How Do Regulated and Unregulated Labor Markets Respond to Shocks? Evidence from Immigrants During the Great Recession
|
Résumé |
en
We study wage adjustment during the recent crisis in Italy using a unique dataset on immigrant workers that includes those employed in formal and informal sector. We find that before the crisis immigrants’ wages in the formal and informal sectors moved in parallel (with a 15% premium in the formal labor market). During the crisis, however, formal wages did not adjust down while wages in the unregulated informal labor market fell so that by 2013 the gap had grown to 32%. The difference was particularly salient for workers in occupations where the minimum wage is likely to be binding, and in “simple” occupations where there is high substitutability between immigrant and native workers. Calibrating a simple partial equilibrium model of spillovers between formal and informal markets, we find that less than 10% of workers who lost a formal job during the crisis move to the informal sector. We also find that if the formal sector wages were fully flexible, the decline in formal employment would be in the range of 1.5–4.5%—much lower than 16% decline that we observe in the data.
|
Auteur(s) |
Sergei Guriev
1, 2
, Biagio Speciale
3, 4
, Michele Tuccio
5, 6, 7, 8
1
ECON -
Département d'économie (Sciences Po)
( 226874 )
- 28 rue des Saints-Pères - 75007 Paris
- France
2
CEPR -
Center for Economic Policy Research
( 143559 )
- Royaume-Uni
3
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
4
PJSE -
Paris Jourdan Sciences Economiques
( 1171428 )
- 48 boulevard Jourdan 75014 Paris
- France
5
University of Southampton
( 300666 )
- University Road, Southampton SO17 1BJ
- Royaume-Uni
6
DIAL -
Développement, institutions et analyses de long terme
( 12772 )
- DIAL - 4 rue d'Enghien - 75010 Paris
- France
7
LEDa -
Laboratoire d'Economie de Dauphine
( 163511 )
- "Place du Maréchal de Lattre de Tassigny 75775 PARIS Cedex 16 "
- France
8
Center for population change
( 557055 )
- France
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Non spécifiée
|
Date de publication |
2019-03
|
Volume |
35
|
Numéro |
1
|
Page/Identifiant |
37 - 76
|
Date de production/écriture |
2019-03-01
|
Licence |
Paternité
|
Domaine(s) |
|
Mots-clés (JEL) |
|
Référence interne |
|
Projet(s) ANR |
|
DOI | 10.1093/jleo/ewy017 |
Spire (Sciences Po) | 2441/73bviabv8o80nrgh0mm5h3163q |
Fichier principal
2019-guriev-speciale-and-tuccio-how-do-regulated-and-unregulated-markets-respond-to-shocks-evidence-from-immigrants-during-the-great-recession.pdf ( 575.92 Ko
)
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