Research

Check In, Check Out: How Periodic Interviews Lead Immigrants to Leave the Labor Force with Jussi Huuskonen (forthcoming in Economics Letters)

Periodic interviews combine job search assistance and monitoring of job search. In 2017, a policy change increased the frequency with which public employment offices interviewed unemployed jobseekers in Finland. We study the effects of periodic interviews on unemployed immigrants’ exit rates from unemployment. Utilizing regional variation in the implementation of interviews, we find that the reform pushed immigrant jobseekers out of the labor force. We find no evidence that the intensifying of interviews increased unemployed immigrants’ transitions to employment, education, or active labor market programs. We document that immigrants’ better language skills are associated with higher employment probabilities.

Regulating Labor Immigration: The Effects of Lifting Labor Market Testing with Jeremias Nieminen, Ohto Kanninen, and Hannu Karhunen (29 January 2025)

Labor market testing (LMT) requires firms to demonstrate there are no local workers available before hiring an immigrant. We examine the effect of removing LMT requirements for non-EU workers in Finland utilizing regional and temporal variation in occupations exempted from LMT. We combine individual and firm-level administrative data with hand-collected information on local changes in labor market testing rules and apply a staggered difference-in-differences research design. We find that removing the LMT requirement increases the inflow of non-EU workers to treated occupation-region cells. This is mainly driven by non-EU individuals already in Finland. Five years post-treatment, the negative earnings effect is 2% at the occupation-region level and 4% for incumbent workers at the individual level, more pronounced in low-wage and service-oriented occupations and among older workers. In low-paying occupations, the earnings effect is largely attributable to decreased working hours and to a suppressed wage drift for stayers. However, we also observe a positive employment effect at the individual level for workers in the upper segment of the wage distribution. At the firm level, LMT removal increases the number of non-EU employees while having no effect on profitability.

Equity and Efficiency in Anti-Discrimination Policy: Evidence from an Anonymous Hiring Pilot with Tuomo Virkola and Ohto Kanninen (15 October 2024).

Anonymous hiring restricts the information available to hiring managers, potentially creating a trade-off between equity and hiring efficiency. To study this trade-off, we leverage a pilot program by the City of Helsinki in which hiring for some, but not all, job titles was subject to anonymization. We find that foreign-named applicants were more likely to be hired without detrimental effects on job turnover or wages. Announcing anonymization increased job applications, but not by groups that ex-post had the most to gain. Our results suggest that anonymization can be an effective tool to combat discrimination.

Labor Policies and Immigrant Employment with Hannu Karhunen (Under revision for the Journal of Economic Surveys).

This survey describes the recent literature on integration and active labor market policies that strive to enhance the employment of immigrants. We searched several databases, and after screening, 63 studies satisfied our predetermined inclusion criteria. The first criterion is that the studies examine policies in Europe. Second, the search was limited to studies published between 2005 and 2024. Third, our primary outcome of interest is employment. Other outcome variables are income, labor market participation, and duration of unemployment. We focus on studies that offer experimental or quasi-experimental evidence on the effects of policies on the employment of immigrants. We divide the policy measures into five groups: integration programs, language training, benefits, childcare, and residency policies. Our main finding is that well-executed integration measures can improve the labor market attachment of immigrants, speed up the process of entering employment, and improve the quality of attained jobs.