Immigration: Policies, Mobility, and Integration

Essay I: Labor immigration is an important tool that countries can use to address labor shortages. The design of labor immigration policies may affect flows and the composition of immigrant workers, which can, in turn, have an effect on firms and workers in the host country. I quantify such effects by studying a major Swedish reform that made it significantly easier for firms to recruit non-Europeans. Using a difference-in-differences setup, I exploit variation in the strictness of immigration rules which affected industries differentially before and after the reform. Treated industries are predominantly lower-skilled, and concentrated in sectors like hotels and restaurants and retail trade sectors. Using linked employer-employee data, I study the effect of the reform on both firm-level and individual-level outcomes. I find that the mean earnings at firms in treated industries unambiguously increase. Firms also seem to take advantage of skill complementarities between natives and immigrants and intensify their overall hiring of high-skilled workers. Moreover, I follow native incumbents' employment and earnings over time and find heterogeneous effects along the skill and age dimensions. Essay II (with Matz Dahlberg, Mattias Engdahl and Till Nikolka): We evaluate the importance of spillover effects of national migration policies by estimating the effect of stricter rules on family reunification in Denmark in 2002 on migration to neighboring countries. We reach two main conclusions. First, we show that stricter rules for reunification lead to a clear and significant increase in emigration of Danish citizens with immigrant background. Most of the emigrants left Denmark for Sweden, a neighboring country in which reunification was possible. Second, we demonstrate that a significant fraction of the individuals that came to Sweden to reunite with a partner left the country again; within two (eight) years around 20% (50%) had left, with the absolute majority leaving for Denmark. Our results indicate that potential spillover effects from national migration policies should be taken into account when forming migration policy. Essay III (with Valentin Bolotnyy): We use administrative Swedish data to show that, conditional on parent income, immigrant children have similar incomes and higher educational attainment in adulthood than native-born Swedes. This result, however, masks the fact that immigrant children born into poor families are more likely than similar natives to both reach the top of the income distribution and to stay at the bottom. Immigrant children from high-income families are also more likely than natives to regress to the economic bottom. Notably, however, children from predominantly-refugee sending countries like Bosnia, Syria, and Iran have higher intergenerational mobility than the average immigrant child in Sweden. Essay IV (with Valentin Bolotnyy): Home ownership is an important indicator of socio-economic status and a good proxy for wealth. We show that on average, children of immigrants are less likely to own their homes than children of natives at age thirty. The difference remains even after we control for socio-economic characteristics, parental background, and municipality of residence. We find that parental background - both in terms of parents' income and education, but also their own home ownership status - is the most important determinant of home ownership in adulthood. We additionally investigate the role of age at arrival on outcomes in adulthood and find a significant negative effect of age at arrival on income and education, which also translates into a lower probability of owning a home in adulthood. However, growing up in a highly-educated family may partly mitigate this negative effect