Gabriele Lucchetti

Working Papers

Skills, Distortions, and the Labor Market Outcomes of Immigrants across Space  (current draft available upon request - new draft in preparation)

The paper received the "Peter Sinclair Prize" as the 3rd best paper at the Macro, Monetary and Finance (MMF) PhD Conference

(Slides)

I study the geography of immigrants' labor market outcomes and its implications for spatial inequality. Using US micro-data, I document that, compared to natives and immigrants from high-income countries, immigrants from low-income countries i) do not earn a premium from working in big cities and ii) are more likely to work in non-cognitive occupations and live in big cities. To shed light on the mechanisms driving these facts, I build a quantitative general equilibrium spatial model where the technology of firms in cities favors cognitive skills, workers are heterogeneous in human capital and tastes for cities and occupations, and immigrants face labor market distortions. Removing all sources of heterogeneity between immigrants and natives reduces their earnings gap by 29 percent at the expense of an increase in the earnings gap between cities by 2.3 percent. An immigration policy opening borders to non-college-educated workers increases the earnings gap between immigrants and natives by 1.6 percent but reduces the earnings gap between cities by 1.3 percent.

Unlucky Migrants: Scarring Effect of Recessions on the Assimilation of the Foreign-Born joint with Alessandro Ruggieri 

Accepted at Labour Economics

This paper studies how aggregate labor market conditions affect the intra-generational assimilation of immigrants in the hosting country. Using data from the American Community Survey, we leverage variation in the forecast errors for national and local unemployment rates in the U.S. at the time of arrival of different cohorts of immigrants to identify short- and long-run effects of recessions on their careers. We document that immigrants who enter the U.S. when the labor market is slack face large and persistent earnings reductions: a 1 p.p. rise in the unemployment rate at the time of migration reduces annual earnings by 4.9 percent on impact and 0.7 percent after 12 years since migration, relative to the average U.S. native. This effect is not homogeneous across migrants: males without a college education from low-income countries are the only ones who suffer a scarring effect in their assimilation path. Change in the employment composition across occupations with different skill contents is the key driver: were occupational attainment during periods of high unemployment unchanged for immigrants, assimilation in annual earnings would slow down on average by only 3 years, instead of 12. Slower assimilation costs between 1.7 and 2.5 percent of lifetime earnings to immigrants entering the U.S. labor market when unemployment is high.