Thomas Le Barbanchon, Bocconi University Milan

"How do migrants and natives search for jobs?"

Abstract

In this paper, we explore job-search-related sources of the migrant-native earnings gap and unemployment duration gap. Using a sample of over 400,000 jobseekers from the largest online platform in Sweden, we find that migrants from developing countries send more applications and apply to jobs that pay 3.2\% less (1.5\% less when controlling for observable characteristics). 

This behaviour could stem from migrants expecting a higher penalty in the success of their applications for higher-paying jobs, or from information frictions. Leveraging data on hires that we can match to applications at the worker-employer level, we show that the probability of being hired is indeed lower for migrants than for natives, but that the gap is not larger for higher-paying jobs, suggesting the relevance of information imperfections. 

To test this hypothesis, we take advantage of a randomised experiment that nudged jobseekers to apply to randomly different sets of jobs. We find that migrants nudged to apply to higher-paying jobs experience higher (rather than lower) probabilities of being hired, which supports the hypothesis of undershooting due to information frictions.

Co-authors: Marion Brouard, Lena Hensvik, and Roland Rathelot.

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Contact person: Robert Mahlstedt