Foreign Workers in Italy: Are They Assimilating to Natives? Are They Competing Against Natives? An Analysis by the S.S.A. Dataset.

Abstract

The paper shows that it is possible to derive a dataset on foreign workers from the Social Security Archive by using the place of native workers; however, the cumulative duration of occupation of foreigners and natives is more similar. The analysis of the wage birth as selecting device and controlling for age and date of entry. Three main issues have been analyzed in the paper: the employment behavior of foreign workers and the degree of their assimilation, their wage differential and their wage assimilation, as well as their competitive or complementary role in the labor market. Migrant workers are more mobile than differential; using the Oaxaca decomposition reveals a small wage gap, 70% explained by the different characteristics of native and foreign labor force and only the remainder is due to unobserved characteristics or discrimination. Last but not least the competitive or complementary role of foreign workers in the labor market is explored. The first difference estimates of the native workers' wage do not appear to be affected by variations in local demand or by the share of foreign workers and this result was to be expected because the institutionalized system of determining wages is not sufficiently flexible to react quickly to external changes such as an increase in the supply of labor.