On Immigration, Geographic and Labour Market Mobility

This thesis comprises three chapters.

In the first chapter, I use a difference-in-difference setting to investigate the effect of stricter immigration policies in terms of benefit claims and of labour supply of a newly immigrated workforce. I analyse the case of the European 2004 Accession (A8) countries and the temporary limitations in the eligibility to welfare assistance that immigrants from these countries faced until April 2011 in the UK. I find that under the stricter regime A8 immigrants claim less benefits and are more likely to be in employment. Results are consistent with the hypothesis that, if denied welfare support, immigrants may be more keen on increasing their labour supply in order to compensate for the foregone receipt of assistance, especially when they are more financially constrained. Nevertheless, even when restrictions are relaxed, immigrants still work more than their UK-born counterparts and their take-up of benefits is not higher than that of the natives.

In the second chapter, I explore the geographical mobility patterns of labour market entrants in the UK and emphasize the role of education, using BHPS data and building a new distance variable based on geographical coordinates of each individual’s Local Authority District of residence. The potential bias generated by unobservable individual and ‘environmental’ characteristics is dealt with by using family fixed effects and instrumental variables. I find that in the first few years after their transition out-of-education, young adults move farther away from their parental household the higher their educational attainment. In particular, what matters the most is having at least a first degree or not. Also, past movements and family attitude towards education have a major impact on current mobility, while local labour market factors do not seem to be as important. As expected, controlling for family fixed effects gives lower estimates than OLS. The combination of family fixed effects with instrumental variables suggests that the bias arising in the OLS estimates is generated almost entirely by unobservable factors that pertain to ‘environmental’, rather than individual, characteristics. The effect of all other covariates is relatively unchanged. Results hold to a number of sub-samplings and robustness checks.

In the third chapter, I investigate the impact of job turnover during the labour market early career of British young women on their fertility choices, using retrospective information from the British Household Panel Survey. The sufficiently wide time-span (1959-2006) allows me to evaluate fertility outcomes in the long-run. I also try to disentangle the effect between voluntary and involuntary job turnover, the first being associated to career advancement and the latter to job loss. In order to account for the endogeneity of job experience to fertility I instrument job turnover with industry-level historical series of the unemployment rate and the growth in the average earnings drawn from the British Labour Statistics, the Labour Force Survey and the New Earnings Survey. Estimates suggest a negative, yet imprecisely estimated, impact of voluntary job turnover during early career on the predicted number of children. Conversely, job losses yield a positive effect on fertility.