Browsing by Subject "labor markets"
Now showing items 1-2 of 2
-
(2013)In the standard model of competitive labor markets, an influx of immigrants increases the labor market prospects of native workers whose labor is complementary to the immigrants' labor and decreases that of those native workers whose labor is substitutable with immigants' labor. The standard model cannot, however, explain how vacancies and unemployment exist at the same time, or allow the job creation to respond to the arrival of new workforce. This master's thesis studies the effects of immigration on the wages, employment and welfare of native workers when firms and workers have to spend resources to find a suitable job match. In this environment, search frictions produce unemployment and the job creation is allowed to respond to an influx of immigrants. Matching model with three different settings is used to study these effects. In the first one immigration is introduced to a two-country matching model to see how an influx of immigration affects wages, unemployment rate and welfare of natives through probabilities of finding a job and finding a worker for an open vacancy. By Pareto ranking the three equilibria the model produces it is shown that immigration is beneficial to all parties involved. The second setting is a one-country model with two sectors and examines how an influx of immigrants to one of the sectors affects natives' welfare in that sector. The effect is ambiguous and comprises of an impact through matching probabilities and an impact though relative prices. Finally, the impact of low-skilled immigration on both high-skilled and low-skilled native workers is studied. It will be shown that an influx of low-skilled immigrants has a positive impact on the wages and employment rate of high-skilled natives but an ambiguous impact on those of low-skilled natives. When the education choice is endogenized, however, more natives decide to acquire education and the overall effect is positive. While these results do not perfectly fit the empirical findings on the subject, they offer one mechanism to understand the behavior of labor markets with immigration, and help to understand the empirical results that contradict the predictions by the standard model.
-
(2023)This thesis aims to identify and measure labor demand and supply shocks caused by COVID-19 in Finland in 2020 and aims to replicate results from an earlier study by Brinca et al. in 2021. The method utilized is a model estimation on a Bayesian structural vector autoregression framework on quarterly data of hours worked and real wages by work sector. In order to capture the labor market dynamics in Finland within the framework, a literature review is conducted and the theory and methods are then outlined. Informative priors and literature-based parameters are established for the model, and analysis software computation is then used to and estimate the model. The model estimations show that most sectors suffered large negative supply and demand shocks in the first quarter of 2020, with significant heterogeneity between sectoral shock response. It is assessed that sectors with greater possibilities of remote work are less affected by the shocks than sectors of high-contact work. Labor supply shocks account for over 80% of the total shock effects. In the second quarter of 2020, most sectors, in turn, experienced large positive supply and demand shocks that affected the sectors with significant heterogeneity once more, with the previous quarter’s most affected sectors again experiencing the largest shocks. Labor supply shocks again accounted for around 80% of the total shock effects. The results in this thesis share a trend with the earlier study in sector heterogeneity and the shocks’ total impacts, but find an increased share in the effect of labor supply shocks on the total impact of the COVID-19 shocks.
Now showing items 1-2 of 2