Staff Working Paper No. 1,099
By Maria Balgova and Hannah Illing
This paper examines the differential impact of job displacement on migrants and natives. Using administrative data for Germany from 1997–2016, we identify mass layoffs and estimate the trajectory of earnings and employment of observationally similar migrants and natives displaced from the same establishment. Despite similar pre-layoff careers, migrants lose an additional 9% of their earnings in the first five years after displacement. This gap arises from both lower re-employment probabilities and post-layoff wages and is not driven by selective return migration. Key mechanisms include sorting into lower-quality firms and depending on lower-quality coworker networks during job search.
The labour market costs of job displacement by migrant status
