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RESEARCH AND PUBLICATIONS
IMMIGRATION AND LABOR MARKET MOBILITY IN ISRAEL, 1990 TO 2009
SARIT COHEN-GOLDNER, ZVI ECKSTEIN and YORAM WEISS
The
unexpected collapse of the Soviet regime in 1989 led to a dramatic change in
the country's emigration policy, which now permitted its citizens to emigrate
freely. In particular, Jews in the Former Soviet Union (FSU) were now able to
immigrate to Israel
without restriction. On arrival, they automatically became Israeli citizens
with access to a generous package of benefits, including subsidized mortgages
or rental assistance, language courses and vocational training. They also
gained access to a labor market characterized by much higher wages than those
in the FSU. Over the next 10 years, Israel absorbed approximately
900,000 immigrants from the FSU (which constituted about 20% of the Israeli
population), with about 40% of them arriving during the first three years.
The change in emigration policy was exogenous to the economic conditions in Israel
and to the pre-emigration accumulation of human capital by the immigrants. As
such, it provides a unique platform for evaluating basic issues in the
economics of immigration.
The
economic analysis of immigration starts with two simple questions: "Why
do some people immigrate?" and "What happens when they do?"
Regarding the first question, the answer is relatively clear in the case of Israel: the opportunity for higher income and
the social and emotional ties of FSU Jews to Israel. The answer to the second
question is more complicated and constitutes the main focus of the book. The
book's main methodological innovation is the use of empirical stochastic
dynamic micro models that combine search with investment in human capital.
The focus of the research is on the labor market performance of immigrants in
Israel.
We also discuss their impact on the wages and employment of native Israelis.
The
fact that the option of immigrating to Israel was not readily available
to FSU Jews prior to 1989 is important to our analysis since it allows us to
treat the immigrant's human capital investment decision in the FSU as
exogenous. In other words, an immigrant's human capital on arrival was
determined in the FSU before the option of moving to Israel was even considered to be
a possibility and is therefore appropriate to the labor market there. As a
result, there was a complete mismatch between the skill distribution of
immigrants and the demand for skills in the Israeli labor market. Therefore,
it is not surprising that, on arrival, there was a substantial occupational
downgrading of immigrants and the local labor market provided a low return on
imported skills. It is only over time that immigrants were able to climb the
occupational ladder and to improve their wages. We construct and estimate
several dynamic models that explain the gradual adaptation of immigrants to
the Israeli labor market.
The
initial mismatch between the occupational distribution of immigrants and the
local labor market distribution of jobs created a difficult dilemma for both
the immigrants and policy makers. Should the government intervene in the
labor market in order to improve outcomes for both immigrants and natives and
if so how is this to be accomplished? The answer to this question depends on
the speed of immigrants' adaptation to the Israeli labor market, as a result
of which they became closer substitutes for comparable Israeli workers (i.e.,
those with the same level of schooling and work experience). The substitution
between immigrants and native workers and its impact is one of the first
issues we analyze in the book. We then shift our focus to the immigrants'
employment and wage dynamics during their first decade in Israel.
Table of Contents of the Book
(MIT
Press, forthcoming)
Tables
and Figures
We present a complete set of the tables and figures
included in the book, along with the code used to construct them (where
available). Note that the Excel files include hidden worksheets containing
the data and calculations.
Description of Data Files
.
Related
Papers
- M. Gotlibovski "Absorption
of 1990-92 Immigrants in Israel: Interaction between Housing and Labor
Markets ", 1997 (Hebrew).
- S. Cohen and C. T. Hsieh "Macroeconomic and
Labor Market Impact of Russian Immigration in Israel ", 2001.
- Z. Eckstein and Y. Weiss "The Integration of Immigrants from
the Former Soviet Union in the Israeli Labor Market ", 2002.
- Y. Weiss, R. Sauer and M. Gotlibovski "Immigration, Search
and Loss of Skill ", 2003.
- Z. Eckstein and Y. Weiss "On the Wage Growth of Immigrants: Israel
1990-2000 ", 2004.
- S. Cohen-Goldner and Z. Eckstein "Labor Mobility of
Immigrants: Training, Experience, Language, and Opportunities
", 2008.
- S. Cohen-Goldner and Z. Eckstein "Estimating the Return to
Training and Occupational Experience: The Case of Female Immigrants
", 2010.
Other
Papers
- S. Cohen "Training
and Work Experience Effects on Absorption of Female Immigrants in Labor
Market ", 2001 (Hebrew).
- S. Cohen and Z. Eckstein "The Participation of Female Immigrants in
Vocational Trainings ", 2002.
- S. Cohen-Goldner and Z. Eckstein "Evaluating Active Labor Market
Policies for Female Immigrants ", 2005.
- S. Cohen-Goldner and Z. Eckstein "Evaluating Active Labor
Market Policies for Female Immigrants ", 2005 (Hebrew).
- S. Cohen-Goldner "Immigrants in the
Israeli Hi-Tech Industry: Comparison to Natives and the Effect of
Training ", 2006.
- S. Cohen-Goldner, Z. Eckstein and T. Larom
"Ten Years of Integration of
Former Soviet Union Immigrants in the Israeli Labor Market ",
2006 (Hebrew).
Presentations
- Z. Eckstein and S. Cohen "Immigrants
in the Labor Market: Impact, Integration and Methods ",
2001.
- Z. Eckstein and S. Cohen "Labor Mobility of
Immigrants: Training, Experience, Language and Opportunities
", 2002.
- Eleanor Cooper, Westlake
High School, 9th grade
(freshman) "Russians in Israel: A Flood of
Immigrants ", 2005.
- Z. Eckstein "Immigrants and the Labor Market:
Facts and Policy ", 2006.
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