High-School Dropouts and Transitory Labor Market Shocks: The Case of the Spanish Housing Boom

This paper addresses the implications of transitory changes in labor market conditions for low versus high educated workers on the decision to acquire education. To identify this effect, I use the improvement in the labor market prospects of low educated workers motivated by the increases in employment and wages in the construction sector during the recent housing boom. The estimation strategy is based on the fact that changes in the labor market driven by the construction sector affect only men. Increases in construction activity are found to increase men's propensity to drop out of high-school, relative to women. According to this finding, policies promoting education should strengthen when in the presence of transitory shocks in the labor market that make dropping out more attractive.high-school dropout, housing boom, Spain

Fostering household formation: evidence from a Spanish rental subsidy

In Southern Europe youngsters leave their parental home significantly later than in Northern Europe and the United States. In this paper, we study the effect of a monthly cash subsidy on the probability that young adults live apart from parents and childbearing. The subsidy, introduced in Spain in 2008, is conditional on young adults renting accommodation, and it amounts to almost 20 percent of the average youngsters' wage. Our identification strategy exploits the subsidy eligibility age threshold to assess the causal impact of the cash transfer. Difference-in-Differences estimates show positive effects of the policy on the probability of living apart from parents, living with a romantic partner, and chidbearing for 22 year-olds compared to 21 year-olds. Results persist when the sample is expanded to include wider age ranges. The effect is larger among young adults earning lower incomes and living in high rental price areas. This is consistent with the hypothesis that youngsters delay household formation because the cost is too high relative to their income

The Effect of Product Market Competition on Job Instability

This paper assesses the impact of product market competition on job instability as proxied by the use of fixed-term labor contracts. Using both worker data from the Spanish Labor Force Survey and firm data from the Spanish Business Strategies Survey, I show that job instability rises with competition. In particular, a one standard deviation increase in competition in an economic sector decreases the probability that a fixed-term worker gets an open-ended contract within that sector in a given year by more than 30%. The effect is identified by means of exogenous shifts in competition brought about by changes in legislation.fixed-term employment, product market competition, labor contract

Network Effects on Migrants' Remittances

This paper explores the existence of network effects in migrants’ remittance behavior. In this study, networks are defined as groups of immigrants from the same country that live in the same locality. Using the National Immigrant Survey, a unique database for Spain, immigrants are found to be more likely to remit and to remit more money if they belong to high remitting country groups. This finding sheds new light on the determinants of the decision to remit, as well as on the scope of immigrant networks.immigrant networks, remittances, Spain

Immigrant networks and remittances: Cheaper together?

We estimate the causal effects of immigrant networks on individuals’ remittance sending behavior for migrants from many different countries residing in Spain. Our methodology addresses typical issues that arise when estimating network effects: reverse causality, common unobserved factors, and self-selection. In particular, we instrument the size of networks by predicting the number of migrants in each location using the location's accessibility by distinct methods of transportation and information about how migrants from each country initially arrived in Spain. Our findings show that immigrants from above-average remitting countries remit more if they live in larger networks. For a subset of countries that receive large remittance flows from Spain, we show that migrants in larger networks are less likely to use most expensive remittance channels, and that cost spreads between the most expensive and cheapest remittance service provider are lower for countries characterized by stronger networks. Our results suggest that network effects could boost policy efforts to lower remittance pricesZoë Kuehn acknowledges financial support from the Ministerio de Economía Industria y Competitividad (ECO2017-82882-R) in Spai

Immigrants move where their skills are scarce: Evidence from English proficiency

This paper studies whether individuals tend to migrate to countries where their skills are scarce or abundant. Focusing on English language skills, we test whether immigrants who are proficient in English choose to move to countries where many or few individuals speak English. We use the introduction of English classes into compulsory school curricula as an exogenous determinant for English proficiency of migrants of different ages, and we consider cohort data on migration among 29 European countries, where English is not the official language and where labor mobility is essentially free. Our estimation strategy consists of refined comparisons of cohorts, and we control for all variables traditionally included in international migration models. We find that immigrants who are proficient in English move to countries where fewer individuals speak English, and where hence their skills are scarce. We also show that similar results hold for general skill