Immigration and Labor Market Mobility in Israel, 1990 to 2009

Notes

Notes Chapter 2 1. The figures for 1922 to 1982 are taken from Ben-Porath (1986). 2. The main mechanism identified by Ben-Porath for this result is based on the growth in capital inflows as a result of immigration. The import of private capital was substantial during the British mandate period (1922 to 1947), and it was later replaced by government borrowing abroad during the early years of the State (1951 to 1964). During the wave of immigration from the FSU analyzed here investment from abroad played a major role in growth. 3. In the next chapter we focus on the impact of imported education on the success of immigrants in the local labor market. 4. We define three broad occupational categories: occupation 1, which includes engineers, physicians, professors, other professions requiring an academic degree and managers; occupation 2, which includes teachers, technicians, nurses, artists and other professionals; and occupation 3, which includes blue-collar and unskilled workers. 5. Chapter 3 describes in detail the wage profile of immigrants and the occupational downgrading they experienced. 6. We use the standard definition of the participation rate as the proportion of total employed and unemployed within the population of individuals aged 15 and above. 7 . The unemployment rate is calculated as the proportion of unemployed individuals within labor force participants. 8. In 1993, due to political changes and reforms in the health services, the power of the main labor union in Israel (the Histadrut) weakened dramatically and union coverage declined significantly. These changes were not related to the arrival of the FSU immigrants. 9. This section is based on Eckstein and Weiss (2002). 10. Chapter 3 describes in detail the wage regressions estimated for immigrants and natives. 11. This section is based on Cohen and Hsieh (2001). 12. We lack a good measure for capital utilization. We therefore ignore it and focus only on capital accumulation. However, there is casual evidence from data on shift work and 274 Notes the sharing of housing by parents and adult children, which indicates that capital utilization was a factor in smoothing the adjustment process. 13. Specifically, we assume that Nt increases by 4.67 percent in 1990, 3.56 percent in 1991, 1.48 percent in 1992, 1.45 percent in 1993, 1.47 percent in 1994, 1.36 percent in 1995, 1.21 percent in 1996, and 1.1 percent in 1997, and that it remains constant for all subsequent years. 14. We used the GAMS program for the calibration exercise. 15. Relaxing the assumption in the second method that immigrants are as productive as natives upon arrival and assuming instead that immigrants are less productive (as in the first method) would lead to smaller changes in real wages, investment in capital, and so forth. Chapter 3 1. This chapter is based on Eckstein and Weiss (2004), On the wage growth of immigrants: Israel 1990–2000, Journal of the European Economic Association 2 (4): 665–95 © 2004 by the European Economic Association. 2. See the surveys by Borjas (1994, 2000) and LaLonde and Topel (1997) as well as Chiswick (1978). 3. Lalonde and Topel (1991) define the rate of convergence as the reduction in the difference between the log wages of immigrants and those of natives. 4. This result may suggest that the large government assistance for immigrants in Israel did not affect the rate of assimilation into the labor market. However, the inflow of skilled immigrants relative to the existing stocks was much smaller in the United States. 5. Since the relative prices of skills are determined by the technology of production, namely the demand side, the coefficients θs can also be interpreted as parameters representing quality, whether objective or perceived, and these coefficients change as the immigrant’s imported skills become more applicable to local market conditions. For the analysis of individual investment decisions, the distinction between price and quality makes no difference . Following the recent literature (e.g., Juhn, Murphy, and Pierce 1993), we use the term “price.” In the aggregate, the different values of θs together with the available number of individuals with each skill determine the supply of K and the rental rate R. Given the equilibrium value of R and the vector of θs, the bundle of skills that each person possesses can be evaluated in terms of the consumption good. In a more general specification, skills need not be perfect substitutes and their respective prices will depend on the aggregate stocks of the different skills (Heckman...