Date of Award

Spring 1-1-2017

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Martin Boileau

Second Advisor

Ann Carlos

Third Advisor

Miles Kimball

Fourth Advisor

Giacomo Rondina

Fifth Advisor

Asaf Bernstein

Abstract

In my job market paper, I examine the role of migration in determining unemployment levels in a search model with migration. Search models have been used extensively to explain differences in unemployment rates, and are often used to compare labor markets across countries. However, much of what we know about labor markets in developed economies ignores who is moving for what reasons, and is largely limited to within-country studies, despite evidence that migration is increasing over time. I build a theoretical model to follow workers' employment status and location, and utilize differences in labor market institutions to show that capturing these worker flows across borders is an important aspect of migration and unemployment that has been largely ignored. This sheds light on the considerations workers take when moving and highlights the role labor market structures play in equilibrium unemployment across countries. An application of the model shows that the model is capable of generating large migration flows comparable to between US states, as well as smaller flows as observed between European countries.

In my second paper, I expand upon the model in my job market paper to add costs to migrants' decisions to move and be away from home. Migration across national borders is not a costless endeavor for workers to undertake. They face fixed costs to move, and flow costs while abroad. Workers report salience of language barriers, housing markets, and cultural distance in preventing them from making an otherwise desirable move across national borders. Incorporating these costs into a model of labor search with migration improves the model's performance relative to a similar model without costs when using European labor markets as an example. The model is also more realistic than models without migration involving meaningfully disparate origins and destinations, or without any migration. Under the context of costly migration, I provide evidence that at least one explanation for the insufficiency of a single labor market in the EU to ensure full convergence of labor market conditions lies in the costs workers face from living away from home, and not from a lack of migration.

In my third paper, I eliminate restrictions on workers from the model in my first two papers and allow all workers to move freely. In this environment, all workers face competition from other groups, as well as costs to their movement. Labor search and migration allows for the study of the effect of labor market characteristics on equilibrium migration, unemployment, and wages. I provide a theoretical model to explain why countries have different unemployment rates despite similarities in other factors, and a mechanism for the differentiated wage impacts of immigrants on both sending and receiving labor markets.

Included in

Economics Commons

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