IdEP Seminar, Gabriele Lucchetti - "Skills, Distortions, and the Labor Market Outcomes of Immigrants across Space"

Institute of Economics

Date: 15 January 2024 / 12:30 - 13:30

Online in MS Teams

I study the geography of immigrants’ labor market outcomes and its implications for spatial inequality. Using US micro-data, I document that, compared to natives and immigrants from high-income countries, immigrants from low-income countries i) do not earn a premium from working in big cities and ii) are more likely to work in non-cognitive occupations and live in big cities. To shed light on the mechanisms driving these facts, I build a quantitative general equilibrium spatial model where the technology of firms in cities favors cognitive skills, workers are heterogeneous in human capital and tastes for cities and occupations, and immigrants face labor market distortions. Removing all sources of heterogeneity between immigrants and natives reduces their earnings gap by 29 percent at the expense of an increase in the earnings gap between cities by 2.3 percent. An immigration policy opening borders to non-college-educated workers increases the earnings gap between immigrants and natives by 2.6 percent but reduces the earnings gap between cities by 0.3 percent.

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