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Immigration and the reallocation of work health risks

July 16, 2018

By Osea Giuntella, Carlos Vargas-Silva & Catia Nicodemo

Are immigrants more likely to do risky or physically harmful work than native workers, and do natives benefit from migrants being in more hazardous roles?

Our paper – which is part of work package 5 of the REMINDER project – considers these question by analysing how immigration may affect the reallocation of occupational physical burden (e.g. lifting and carrying heavy loads) and occupational health risks (i.e. injury risk) in the population.

There is a wide literature in economics examining the effect of immigration on wages and employment. However, this discussion typically fails to consider the impact immigration may have on other working conditions that importantly affect individual health and well-being. A few studies provide evidence that immigrants are more likely than native workers to work in risky jobs (Orrenius et al., 2012).

The reasons that can explain this fact are multiple.

  • Immigrants may have a different perception of job risks than natives do, because they arrive from countries where they typically face worse working conditions.
  • Language barriers and lower socio-economic status may explain differences in risk knowledge and perception and may also increase the cost of safety training.
  • Furthermore, several studies have suggested that individuals with lower risk aversion may be more likely to migrate, and this selection may imply that immigrants are less risk-averse than natives.
  • As the exit rates from physically demanding jobs are higher, there may be more opportunities and lower search costs for recent immigrants in these types of jobs.
  • Finally, newly arrived immigrants may face language barriers and, therefore, may have a comparative advantage in working in more manual-intensive jobs rather than in occupations requiring communication and social interaction skills.

Recent studies show that as immigration rises, complementarities of tasks in the production function can account for both the lack of detrimental effects on employment and wages and the reallocation of natives to jobs involving better working conditions (Peri et al., 2009). These labor market adjustments have non-negligible impacts on the health of the native workers (Giuntella and Mazzonna, 2015, Giuntella et al., 2016).

While previous studies analysed the effects of immigration on task-complexity, in our study we separately identify the effect of immigration on the likelihood to engage in risky jobs. We also document that while task complexity is highly correlated with job physical intensity and occupational risk, there is no perfect correspondence.

We focus on the UK, where the debate on immigration has been at the centre of the political discussion and analysis suggests that immigration was one of the key drivers of the British vote to leave the EU.

Using data for England and Wales from the UK Labor Force Survey (2000-2013), we exploit spatial and temporal variation in the share of immigrants residing across local authorities mitigating the concern that our identification strategy may be confounded by spill-over effects and internal mobility.

Our results suggest that immigration pushes UK-born workers towards jobs characterized by lower physical burden and injury risk. The effects are particularly large for UK-born males with medium levels of education holding physically demanding jobs. These workers have lower search and training costs for new jobs and can take advantage of the increased demand for communication-intensive jobs induced by the inflow of immigrants. Consistent with these findings, immigration also reduces the average occupational risk for natives with medium levels of education. We also find that immigration reduced native’s likelihood to report work-related disability and any health problem.

The reallocation of tasks, together with the evidence that immigrants report lower injury rates than natives, suggests that immigration reduces health care, productivity and financial costs associated with work-related injuries in the UK.

Our results are consistent with the existence of imperfect substitution between immigrant and native workers and the observation that immigrants have a comparative advantage in self-selecting into more strenuous jobs. The inflow of workers with a comparative advantage in manual tasks increases the demand for and returns to communication-intensive ones. This increase in returns leads individuals with low re-training costs (medium and high-skilled) towards jobs that are less physically intensive and involve lower injury risks.

These findings, together with the evidence that immigrants exhibit lower injury rates than natives, suggest that the reallocation of tasks could reduce overall health care costs and the human and financial costs typically associated with workplace injuries.

 

You can read the paper here.

About the author

Osea Giuntella is an Assistant Professor of Economics at the University of Pittsburgh and Researcher at COMPAS.

Carlos Vargas Silva is Associate Professor and Senior Researcher at COMPAS and the Principal Investigator of the REMINDER project.

Catia Nicodemo is a senior research fellow at the Centre for Health Service Economics & Organisation, Department of Economics, University of Oxford.

References

Giuntella Osea, Catia Nicodemo, Fabrizio Mazzonna, and Carlos Vargas-Silva “Immigration and the reallocation of work health risks”, Journal of Population Economics (forthcoming)

Giuntella, Osea. Do immigrants improve the health of native workers? IZA World of Labor. Available (2014) at: https://wol.iza.org/articles/do-immigrants-improve-health-of-native-workers/long

Giuntella, Osea, and Fabrizio Mazzonna. “Do immigrants improve the health of natives?.” Journal of health economics 43 (2015): 140-153.

Orrenius, Pia M., and Madeline Zavodny. “11 Immigrants in risky occupations.” International Handbook on the Economics of Migration (2013): 214.

Peri, Giovanni and Chad Sparber. “Task specialization, immigration, and wages.” American Economic Journal: Applied Economics 1.3 (2009): 135-169

 

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