Department of Economics receives research funding from Riksbankens Jubileumsfond and Forte

The researchers at the Department of Economics awarded research grants are:

• Peter Fredriksson for ”Displaced workers: causes, characteristics, and policy options” (SEK 5 509 000 from RJ)
• Linna Martén for ” Refugees, asylum policies, and health outcomes” (SEK 3 330 000 from Forte)
• Olof Åslund för ” Patterns and determinants of immigrant labor market exit” (SEK 4 030 000 from Forte)

Displaced workers: causes, characteristics, and policy options

Peter Fredriksson

This project revolves around displaced workers. It has three parts. In the first part we characterize the selection into displacement: Who gets laid off and why? We revisit the classic questions of wage rigidity and selection into unemployed in previously unexplored ways. The second part of the project investigates the effects of mandated advance lay-off notice, a policy that exists in almost all OECD countries. Despite its wide-spread use, no previous study has credibly estimated the effects of this policy. We ask two main questions: What is the value of the insurance provided by advance notice for workers? What is the size of the costs imposed on firms? The third part of the project estimates the long-run impact of Public Employment Service (PES) caseworkers for the subsequent labor market outcomes of the unemployed. It also examines whether caseworkers are more important for some unemployed individuals. The analysis addresses the following policy question: Is it possible to improve the employment prospects by reallocating unemployed jobseekers onto caseworkers? The project combines up-to-date empirical approaches and the exceptional quality of Swedish administrative data to estimate relationships that are also relevant from a normative point of view.

Refugees, asylum policies, and health outcomes

Linna Martén

More than 3 million have applied for asylum in Europe since 2015, and governments have faced the biggest refugee crisis since the Second World War. There is vast evidence that refugees, in particular women, have poorer mental health than natives (e.g. Norredam et al., 2009; Fazel et al., 2005), and the next generation may also suffer, as children born to refugee parents after migration have an increased risk of psychotic disorders (Saraiva Le ̃ao et al., 2005). This pattern can be explained by both pre-migration factors, such as exposure to traumas, as well as post-migration factors, such as the asylum process, access to health care, and economic hardship. Mental health issues are particularly problematic for immigrant youth, as childhood exposure to stress and adversity is linked to health issues in adulthood (Shonkoff et al., 2012). Yet, there is limited evidence of the type of policies that may mitigate these health disparities, since researchers have not studied the causal impacts of asylum policies. Policy makers thereby have difficulties with making informed decisions about how to design the asylum process.

Our project will evaluate refugees’ health status and the effect of different asylum policies. We will examine who takes the voluntary health screenings, as well as the health impact of having access to primary care during the asylum process, the type of residence permit (temporary or permanent), and the support given to unaccompanied minors. Sweden offers an ideal setting to evaluate the impact of asylum policies due recent policy reforms that can be evaluated with quasi- random designs, the large number of asylum seekers, and the availability of unique administrative register data. Understanding the factors that exacerbates refugees’ health problems is essential for understanding the full impact of asylum policies, developing policies that safeguards refugees’ well-being, and improving the health sector’s ability to meet refugees’ specific needs.

Patterns and determinants of immigrant labor market exit

Olof Åslund

The debate about immigrant-native labor market differentials typically focuses on the labor market entry of the recently arrived and the subsequent integration process. Much less attention has been paid to exit and retirement, even though theory, aggregate statistics and international experience indicate differences between natives and the foreign-born. This project aims at new insights on the labor market exit of immigrants, its development over time and how various factors affect differences to the native population.

The project will first document exit patterns from the early 1970s until today. During this time, the structure of the labor market has changed in parallel with altered characteristics of immigration to Sweden. A second step is to seek explanations to the patterns, e.g. the design of the pension and social insurance systems, individual labor market positions, and workplace related factors. The project will use register data where it is possible to follow individuals over the course of the working life and investigate differences by e.g. gender and country of origin. With rich data on earnings, employment and employer characteristics, the analyses can identify factors related to exits, and whether they can explain differences across groups. Studies using Swedish reforms and labor market information from other countries will further our understanding of how retirement decisions are affected by economic incentives and factors related to the country of origin.

Differences in labor market exit affect individual situations, but can also be important for the macroeconomic consequences of immigration. Improved knowledge about the sources of the patterns provides opportunities for designing systems and policies for decreased origin and gender inequality.

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Riksbankens Jubileumsfond (RJ) is an independent foundation with the goal of promoting and supporting research in the Humanities and Social Sciences. Forte is a research council funding research on health, working life and welfare.