Local labor markets and earnings of refugee immigrants
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This paper estimates how local conditions at the time of immigration influence later outcomes for refugee immigrants to Norway, exploiting the quasi-experimental nature of the Norwegian system for settlement for “quota” or resettlement refugees. A unique administrative dataset with assigned settlement municipalities is used to identify the causal effect of initial location characteristics. Being placed in a labor market where other non-OECD immigrants do well increases own annual labor earnings up to 6 years after immigration. Extended models suggest that this effect is not driven by individual scarring effects: when controlling for the contemporaneous employment rate in the assigned region, effects of initial conditions disappear. Rather, the effects appear to be due to persistence in local labor market conditions combined with limited geographical mobility in response to adverse labor market conditions.
KeywordsImmigration Settlement policies Location choice Labor market outcomes
JEL ClassificationJ15 J18 J61 R23
I wish to thank Olof Åslund, Barbara Petrongolo, Knut Røed, Edwin Leuven, Pål Schøne, Andreas Kotsadam and seminar participants in Århus (ESPE), Torino (EALE) and Bonn (IZA Annual Migration Meeting), as well as two anonymous referees for valuable comments. Data made available by Statistics Norway have been essential.
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