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Speaker:
Juho Alasalmi (University of Konstanz)

Contracted Labor Mobility and Migrant Self-selection on job match quality

Abstract: The potential contracted migrants observe their wages in the source and destination locations before their migration choice. With labour markets characterized by wage dispersion, the migration choices are then not based on the mean or the variance of source and destination location wage distributions but on specific realizations from these distributions. The deviations of the wage realizations from their expectations, the job match qualities in the source and destination, become factors of selection. The Roy-Borjas model extended by wage dispersion in source and destination location labour markets predicts negative selection in the source and positive selection in the destination on job match quality. Mobility costs amplify the selection on job match quality. I discuss how the comparison of migrants and stayers is not helpful in identifying selection on of job match quality and instead, using Finnish administrative data, compare the contracted migrants to workers who similarly contract a job outside their region of residence but choose to commute. Comparison of the contracted migrants and new commuters, groups facing different costs of mobility, but otherwise arguably comparable, reveals selection on job match quality.

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