Essays on the Economics of Migration and Labor Market Entry

In this thesis I explore the labour market dynamics of specific categories, namely migrants and young individuals, relating to their entry into new labour markets and their performance in the subsequent years. In the first chapter, joint with Joseph-Simon Görlach, we analyse the factors that shape the assimilation of migrants after their arrival in the host country. Using US data, we estimate the effect that two different channels of assimilation, skill growth and substitutability, play in determining the wage of migrants. We find that the equivalence of wage growth with productivity, a common assumption in the literature, is in fact inaccurate. Immigrants, as they accumulate skills, become much more productive than reflected in their wage growth, because at the same time they are also becoming more substitutable with natives and long-term migrants, with whom they compete for jobs. This increased competition, in the form of larger labour supply, dampens immigrants’ wages. Therefore, substitutability must be taken into account alongside skill accumulation when evaluating assimilation and the impact of immigration on wages. In the second chapter, I explore the patterns of migration within the European Union, differentiating by skill level and contrasting it with recent trends in the USA and other developed countries. Unlike the other examples, the European Union is experiencing a rising rate of inter-State migration, and I show that this is due in particular to the rising migration rate of high-skilled workers. After showing that the common explanations advanced for migration rate patterns in other countries cannot explain this peculiarity of rising EU migration, I show that a significant cause instead is the streamlining of higher education, through the Bologna Process, and in particular the mutual recognition of qualifications from other EU countries. Finally, the third chapter explores the impact of job instability on young people's entry into the labor market. In particular, I focus on the effect of the expansion of more precarious opportunities, such as internships, on the wage of more stable long-term contracts, such as apprenticeships. I develop a simple model whereby two effects can be simultaneously at play when new legislation increases the share of precarious contracts that can be activated: 1) a selection effect increases the average wage of permanent contracts since the most productive workers are offered a permanent contract; 2) a dumping effect decreases the average wage since entrant workers are willing to bargain lower wages in exchange for the stability of a permanent contract. Using a 2017 legislative change to internships in Italy I am able to exploit interregional variation and estimate the overall effect on apprenticeship wages, revealing that the dumping effect is prevalent.