UCSD ECON 139 - ECON 139 set 10 (9 pages)

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ECON 139 SP 15 Antonovics 9 6 2 15 1 June 2nd 2015 Labor Mobility continuing Some add ons to the previous notes Page 1 of 9 Today s Lecture Page 2 of 9 Positive and Negative Selection PANEL A positive selection PANEL B negative selection Implications Immigrants from countries with egalitarian income distributions like Sweden are positively selected Immigrants from countries with high levels of inequality like Mexico are negatively selected Despite the fact that these prediction conform to our stereotypes about immigrants there is considerable evidence that immigrants from most countries are positively selected Maybe because moving costs are much higher for those with low levels of skill Migration Costs No one should migrate from the US to Sweden and everyone from Sweden should migrate from Sweden to the US But this picture assumes that migration costs are zero The red line depicts wages in the US net of migration costs Migration from Sweden to the US if Skill Sp Page 3 of 9 Immigrant Performance in the U S Labor Market How do immigrants perform in the U S Are immigrants more or less skilled than U S born workers How do immigrants perform over the course of their working life in the U S Cross Sectional Studies of AgeEarnings Profiles of Immigrants Suppose you have data from 1990 How do you calculate the age earnings profile of immigrants One possibility Calculate mean earnings in 1990 for Page 4 of 9 Cross Sectional Studies of Age Earnings Profiles of Immigrants 1 Immigrants initially earn less than US born workers 2 After 14 years immigrants earn more than US born worker Cohort Effects Recall This graph was constructed using earnings data from a single year The individuals who give you the data point for 20 year olds are not the same as the individuals who give you the data point for 65 year olds This is a problem if there is something fundamentally different about individuals who immigrate at different points in time In the following graph assume people arrive in