The Fiscal Effects of Immigration to the UK

In this paper, we investigate the fiscal impact of immigration on the UK economy, with a focus on the period since 1995. We provide estimates for the overall immigrant population for the period between 1995 and 2012, and for more recent immigrants who arrived since 2000, distinguishing between immigrants from European versus non-European countries. Overall, our findings indicate that EEA immigrants have made a positive fiscal contribution, even during periods when the UK was running budget deficits. This positive contribution is particularly noticeable for more recent immigrants that arrived since 2000 in particular from EEA countrie

Career Progression and Formal versus on the Job Training

This paper evaluates the return to formal education over the life-cycle and compare it to informal, on the job training. More specifically, we assess the apprenticeship system in Germany by comparing the long run value of education choices and subsequent labor market outcomes for apprentices and non-apprentices. We develop a structural model of career progression and educational choice, allowing for unobserved ability, endogenous job to job transition, specific firm-worker matches, specific returns to tenure and to general experience. We estimate this model on a large panel data set which describes the career progression of young Germans. We find that formal education is more important than informal training, even when taking into account for the possible selection into education. We use the estimated model to evaluate the long-run impact of labor market policies on educational choices and career progression. We find that policies such as the Earned Income Tax Credit which subsidize low wage have a detrimental effect on the probability of further education and on job mobility.return to education, wages, labor mobility, in work benefits

Non-native speakers of English in the classroom: what are the effects on pupil performance?

There has been an increase in the number of children going to school in England who do not speak English as a first language. We investigate whether this has an impact on the educational outcomes of native English speakers at the end of primary school. We show that the negative correlation observed in the raw data is mainly an artefact of selection: non-native speakers are more likely to attend school with disadvantaged native speakers. We attempt to identify a causal impact of changes in the percentage of non-native speakers. Our results suggest zero effect and rule out negative effects

Rationalizing the UTMS spectrum bids: the case of the UK auction

This paper considers bidder behaviour in the United Kingdom’s UMTS spectrum auction. Evidence is reviewed which shows that some bidders in this auction did not bid straightforwardly in accordance with fixed valuations of the licenses. We go on to consider more speculative hypotheses about bidders’ behaviour, such as the hypotheses that bidders revised their valuations in the light of other bidders’ behaviour, or that bidders’ valuations of licenses depended on which other companies appeared likely to win a license. We find weak evidence in favor of some of these hypotheses, but no hypothesis is supported by strong direct evidence. We conclude that the rationalization of bidding in the United Kingdom’s UMTS auction remains problematic. As a consequence we are cautious regarding the success of the auction in achieving an efficient allocation of licenses

Intergenerational transmission of language capital and economic outcomes

This paper investigates the intergenerational transmission of language capital in immigrant communities from one generation to the next, and the effect of language deficiencies on the economic performance of second generation immigrants. Our analysis is based on a long panel that oversamples immigrants and that allows their children to be followed even after they have left the parental home. Our results show a significant and sizeable association between parental language fluency and that of their children, conditional on a rich set of parental and family background characteristics. We also find that language deficiencies of the children of immigrants are associated with poorer labour market outcomes for females, but not for males. There is a strong relationship between parental language fluency and labour market outcomes for females, which works through the child’s language proficiency

Intergenerational transmission of language capital and economic outcomes

This paper investigates the intergenerational transmission of language capital amongst immigrants, and the effect of language deficiencies on the economic performance of second generation immigrants. Using a long panel that oversamples immigrants, we can follow their children after they have left the parental home. Our results show a sizeable significant association between parents’ and children’s fluency, conditional on parental and family characteristics. We find that language deficiencies of the second generation are associated with poorer labour market outcomes for females only. Finally, we find a strong relationship between parental fluency and female labour market outcomes, which works through the child’s language proficiency

Ethnic minority immigrants and their children in Britain

According to the 2001 UK Census ethnic minority groups account for 4.6 million or 7.9 percent of the total UK population. The 2001 British Labour Force Survey indicates that the descendants of Britain’s ethnic minority immigrants form an important part of the British population (2.8 percent) and of the labour force (2.1 percent). In this paper, we use data from the British Labour Force Survey over the period 1979-2005 to investigate educational attainment and economic behaviour of ethnic minority immigrants and their children in Britain. We compare different ethnic minority groups born in Britain to their parent’s generation and to equivalent groups of white native born individuals. Intergenerational comparisons suggest that British born ethnic minorities are on average more educated than their parents as well more educated than their white native born peers. Despite their strong educational achievements, we find that ethnic minority immigrants and their British born children exhibit lower employment probabilities than their white native born peers. However, significant differences exist across immigrant/ethnic groups and genders. British born ethnic minorities appear to have slightly higher wages than their white native born peers. But if British born ethnic minorities were to face the white native regional distribution and were attributed white native characteristics, their wages would be considerably lower. The substantial employment gap between British born ethnic minorities and white natives cannot be explained by observable differences. We suggest some possible explanations for these gaps

Remittances and temporary migration

In this paper we study the remittance behavior of immigrants and how it relates to temporary versus permanent migration plans. We use a unique data source that provides unusual detail on remittances and return plans, and follows the same household over time. Our data allows us also to distinguish between different purposes of remittances. We analyze the association between individual and household characteristics and the geographic location of the family as well as return plans, and remittances. The panel nature of our data allows us to condition on household fixed effects. To address measurement error and reverse causality, we use an instrumental variable estimator. Our results show that changes in return plans are related to large changes in remittance flows

Wage growth and job mobility in the United Kingdom and Germany

Using data from the British Household Panel Survey for 1991-99 and the German Socio-Economic Panel for 1984-99, the authors investigate job mobility and estimate the returns to tenure and experience. Job mobility was higher in the United Kingdom than in Germany. Returns to experience also seem to have been substantially higher in the United Kingdom, where the wage gain associated with ten years of labor market experience was around 80%, compared to 35% in Germany. The low returns to labor market experience in Germany appear to have been accountable to one group of workers: those with apprenticeship training, who tended to receive fairly high starting wages but to experience relatively low wage growth thereafter. Wage growth due to labor market experience was similar between the two countries for the other skill groups. Returns to tenure were close to zero in both countries

Gender and ethnicity-married immigrants in Britain

In this paper we investigate economic activity of female immigrants and their husbands in Britain. We distinguish between two immigrant groups: foreign born females who belong to an ethnic minority group and their husbands, and foreign born females who are white and their husbands. We compare these to native born white women and their husbands. Our analysis deviates from the usual mean analysis and investigates employment, hours worked and earnings for males and females, as well as their combined family earnings, along the distribution of husbands’ economic potential. We analyse the extent to which economic disadvantage may be reinforced on the household level. We investigate to what extent disadvantage can be explained by differences in observable characteristics. We analyse employment assimilation for all groups over the migration cycle. Our main results are that white female immigrants and their husbands are quite successful, with an overall advantage in earnings over white native born both individually and at the household level. On the other hand, minority immigrants and their husbands are less successful, in particular at the lower end of the husband’s distribution of economic potential. This is mainly due to low employment of both genders, which leads to disadvantage in earnings, intensified at the household level. Only part of this differential can be explained by observable characteristics. Over the migration cycle, the data suggests that employment differentials are large at entry for white immigrant females, and even larger for minority females, but the gap to the native born closes. Assimilation is more rapid for white females