- Migration Policy Centre
European University Institute
via Giovanni Boccaccio 151
50014 Firenze
Italy
Friedrich Poeschel
European University Institute, Migration Policy Centre, Department Member
- After working as migration economist at the OECD (International Migration Division) for several years, I currently en... moreAfter working as migration economist at the OECD (International Migration Division) for several years, I currently engage in academic research as Visiting Fellow at the Migration Policy Centre of the European University Institute. I hold a doctorate in economics from the University of Oxford and a first degree from the London School of Economics. My previous research positions were at the University of Rome "Tor Vergata", the Ecole Polytechnique, and the IAB Institute for Employment Research.edit
We introduce signals to search models of two-sided matching markets and explore the implications for efficiency. In a labour market model in which firms can advertise wages and workers can choose effort, we find that advertisements can... more
We introduce signals to search models of two-sided matching markets and explore the implications for efficiency. In a labour market model in which firms can advertise wages and workers can choose effort, we find that advertisements can help overcome the Diamond paradox. Advertisements fix workers' beliefs, so that workers will react if firms renege on advertisements. Firms then prefer to advertise truthfully. Next, we consider a market with two-sided heterogeneity in which types are only privately observable. We identify a simple condition on the match output function for agents to signal their types truthfully and for the matching to exhibit positive assortative matching despite search frictions. While our theoretical work implies that the efficiency of matching increases as information technology spreads, empirical matching functions typically suggest that it declines. By estimating more general matching functions, we show that the result of declining efficiency can partly be ...
Research Interests:
For instrumental-variable estimation using binary instruments, we offer simple methods to obtain policy-relevant insights beyond local average treatment effects. We demonstrate the methods by evaluating an element of choice introduced... more
For instrumental-variable estimation using binary instruments, we offer simple methods to obtain policy-relevant insights beyond local average treatment effects. We demonstrate the methods by evaluating an element of choice introduced into active labour market policy in Germany by a reform in 2003. Instead of being assigned to training courses by caseworkers, unemployed job seekers receive vouchers allowing them to choose among approved courses. Our data record the receipt of a voucher and the participation in a course. We use exogenous variation in treatment probabilities across locally integrated labour markets as an instrument. Applying our theoretical methods, we can make statements on the distribution of treatment effects and thereby infer the priorities of caseworkers. We further examine the consequences of choice for policy effectiveness and finally explore the distributions of gains or losses from choice.
Research Interests:
Research Interests:
1 Bridget Anderson, Professor of Migration, Mobilities and Citizenship, School of Sociology, Politics and International Studies, University of Bristol; Friedrich Poeschel, Research Fellow, Migration Policy Centre, European University... more
1 Bridget Anderson, Professor of Migration, Mobilities and Citizenship, School of Sociology, Politics and International Studies, University of Bristol; Friedrich Poeschel, Research Fellow, Migration Policy Centre, European University Institute; and Martin Ruhs, Chair in Migration Studies and Deputy Director, Migration Policy Centre, European University Institute. Comments welcome: bridget.anderson@bristol.ac.uk, friedrich.poeschel@eui.eu, martin.ruhs@eui.eu. 2 OECD, 2020. 3 For example Gelatt, 2020; Fernández-Reino et al., 2020; Fasani and Mazza, 2020. Introduction
When employers advertise wages to attract applicants, it is not clear why employers do not renege on these advertisements ex post. Existing models typically assume that employers are somehow committed to their advertisements. This paper... more
When employers advertise wages to attract applicants, it is not clear why employers do not renege on these advertisements ex post. Existing models typically assume that employers are somehow committed to their advertisements. This paper provides an economic explanation that aligns with the empirical evidence. Workers' expectations are fixed by advertisements, and they interpret reneging as a deviation by the employer from mutually beneficial cooperation. By consequence, the worker will exert less effort during the employment relationship if the employer reneges on the advertisement. To avoid this, sufficiently patient employers choose not to renege, and commitment to advertisements arises endogenously.
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Many of the ‘essential workers’ during the Covid-19 pandemic are migrants, playing an important role for the continued functioning of basic services – notably health services, social care, and food supply chains. We argue that this role... more
Many of the ‘essential workers’ during the Covid-19 pandemic are migrants, playing an important role for the continued functioning of basic services – notably health services, social care, and food supply chains. We argue that this role should be taken into account when assessing the impacts of migrant workers and in the design of labour migration and related public policies. Existing studies highlight how the employment of migrant workers in essential services is shaped by interests of employers, sectoral policies, and national institutions. Considerations of how migrants may affect the systemic resilience of essential services – in a pandemic or similar crises – are pervasively absent, not only in policy-making but also in research. Drawing on several disciplines, we outline the concept of systemic resilience and develop implications for the analysis and regulation of labour migration. We call for shifting the focus from the role of migrants in specific occupations and sectors in ...
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Research Interests:
In many countries, policies on family reunification of migrants are under review. Rules have become more restrictive in a number of cases, with unknown consequences for integration. This paper investigates quantitatively how absence of... more
In many countries, policies on family reunification of migrants are under review. Rules have become more restrictive in a number of cases, with unknown consequences for integration. This paper investigates quantitatively how absence of the spouse affects a migrant's integration outcomes in the long term. A theoretical model of migrant's investment behaviour predicts that migrants tend to focus on the short term rather than long-term wage growth, until the spouse arrives and the probability of staying increases. Using the American Community Survey, I estimate the effects from absence of the spouse and delays in the spouse's arrival. An instrumental variable is used to isolate the causal effect of delays. The results indicate that migrants focus more on work when their spouse is absent and that delays significantly decrease their long-term wages, by around 2% per year of delay.
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When employers advertise wages to attract applicants, it is not clear why employers do not renege on these advertisements ex post. Existing models typically assume that employers are somehow committed to their advertisements. This paper... more
When employers advertise wages to attract applicants, it is not clear why employers do not renege on these advertisements ex post. Existing models typically assume that employers are somehow committed to their advertisements. This paper provides an economic explanation that aligns with the empirical evidence. Workers' expectations are fixed by advertisements, and they interpret reneging as a deviation by the employer from mutually beneficial cooperation. By consequence, the worker will exert less effort during the employment relationship if the employer reneges on the advertisement. To avoid this, sufficiently patient employers choose not to renege, and commitment to advertisements arises endogenously. JEL Classification Numbers: J64, D83, J31
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When agents do not know where to find a match, they search. However, agents could direct their search to agents who strategically choose a certain signal. Introducing cheap talk to a model of sequential search with bargaining, we find... more
When agents do not know where to find a match, they search. However, agents could direct their search to agents who strategically choose a certain signal. Introducing cheap talk to a model of sequential search with bargaining, we find that signals will be truthful if there are mild complementarities in match production: supermodularity of the match production function is a necessary and sufficient condition. It simultaneously ensures perfect positive assortative matching, so that single-crossing property and sorting condition coincide. As the information from signals allows agents to avoid all unnecessary search, this search model exhibits nearly unconstrained efficiency.
Research Interests:
For instrumental-variable estimation using binary instruments, we offer simple methods to obtain policy-relevant insights beyond local average treatment effects. We demonstrate the methods by evaluating an element of choice introduced... more
For instrumental-variable estimation using binary instruments, we offer simple methods to obtain policy-relevant insights beyond local average treatment effects. We demonstrate the methods by evaluating an element of choice introduced into active labour market policy in Germany by a reform in 2003. Instead of being assigned to training courses by caseworkers, unemployed job seekers receive vouchers allowing them to choose among approved courses. Our data record the receipt of a voucher and the participation in a course. We use exogenous variation in treatment probabilities across locally integrated labour markets as an instrument. Applying our theoretical methods, we can make statements on the distribution of treatment effects and thereby infer the priorities of caseworkers. We further examine the consequences of choice for policy effectiveness and finally explore the distributions of gains or losses from choice.
Research Interests:
In a labour market model with frictions where workers search for jobs and perfectly informed firms set wages, Peter Diamond found equilibrium wages so low that workers cannot even recoup their search costs. Workers in theory then choose... more
In a labour market model with frictions where workers search for jobs and perfectly informed firms set wages, Peter Diamond found equilibrium wages so low that workers cannot even recoup their search costs. Workers in theory then choose not to search at all but do search in practice (the Diamond paradox). We introduce effort and advertisements as choices for workers and firms, respectively. As such, neither resolves the Diamond paradox. The solution we propose combines efficiency wages with wage advertisements. As workers would not exert effort after a firm reneged on its advertisement, sufficiently patient firms can credibly advertise wages that make participation worthwhile for workers. By requiring contracts with sufficiently high severance payments, workers can ensure that only sufficiently patient firms participate. In equilibrium, workers then do engage in search and may earn positive rents. These results do not depend on a commitment assumption or on any form of competition.
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We revisit the puzzling finding that labour market performance appears to deteriorate, as suggested by negative time trends in empirical matching functions. We investigate whether these trends simply arise from omitted variable bias.... more
We revisit the puzzling finding that labour market performance appears to deteriorate, as suggested by negative time trends in empirical matching functions. We investigate whether these trends simply arise from omitted variable bias. Concretely, we consider the omission of job seekers beyond the unemployed, the omission of inflows as opposed to stocks, and the failure to account for vacancy dynamics. We first build a model of all labour market flows and use it to construct series for these flows from aggregate data on the U.S. labour market. Using these series, we obtain a measure for employed and non-participating job seekers. When we thus include all job seekers, the estimated time trend remains unchanged. We similarly obtain measures for inflows into unemployment and vacancies. When these are included, the magnitude of the time trend is halved but remains significant. When we account for basic vacancy dynamics, the estimated time trend can be fully explained by omitted variable bias. As suggested by this result, we present evidence that empirical matching functions can be interpreted as versions of the law of motion for vacancies: the coefficients in matching functions coincide with the coefficients in the law of motion after correcting for omitted variable bias.
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We present and implement a method to estimate matching functions for labour market segments. Faced with the almost complete lack of macro-level data on labour market segments, we first construct segment-specific matches and stocks of job... more
We present and implement a method to estimate matching functions for labour market segments. Faced with the almost complete lack of macro-level data on labour market segments, we first construct segment-specific matches and stocks of job seekers from a rich set of German administrative data on individual employment histories. We then use some vacancy data for the aggregate level to calibrate an imputation procedure that gives us segment-specific vacancy measures. Our method identifies all parameters of the matching functions for segments such as highly-qualified job seekers, migrants, or the job seekers in a group of occupations.
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See paper with the same title.
See paper with same title.
See paper with same title.
More than three million individuals who were born in Germany lived in another OECD country in 2010/11. To assess the potential that this group represents for the German labour market, this review establishes the distribution of German... more
More than three million individuals who were born in Germany lived in another OECD country in 2010/11. To assess the potential that this group represents for the German labour market, this review establishes the distribution of German emigrants over OECD countries, as well as their age, sex, and educational attainment. Shifts in the German diaspora towards European destination countries and higher educational attainment are documented. The largest German diaspora still resides in the United States, but the diaspora in Switzerland and Spain has grown particularly quickly. International students from Germany have even come to represent the largest group of international students from any OECD country. While German emigrants experience less favourable labour market outcomes than their peers in Germany, the emigrants work disproportionately often in high-skill occupations. Survey evidence suggests that many Germans in Germany consider emigration and that many German emigrants are open to return. Those who have returned in recent years, however, appear to have a lower educational attainment than those leaving.